San Diego Union-Tribune (Sunday)
IS THE WORST OF INFLATION BEHIND US?
San Diego Institute for Economic Research
UC San Diego School of Global Policy and Strategy
NO
Popular consensus on inflation has consistently been wrong, claiming it was “transitory” and would soon dissipate. Prices rose three times as much as projected this time last year. Forecasts now will be similarly wrong. Locking down the economy while distributing fabricated trillions of dollars predictably resulted in accelerated inflation. The ludicrously named “Inflation Reduction Act” further adds fuel to produce more inflation. The damage already done results in inflation compounding until the inevitable major recession wrings it out.
NO
The damage from inflation comes from its durability, not its peak, and it is looking pretty darn persistent. The moderation in July was largely a result of oil prices retreating from June highs. Food, shelter and new vehicle prices continued to increase. Wages have not kept up with inflation and the tight labor market is putting upward pressure on them. Expect more monetary tightening from the Fed.
University of San Diego
YES
It is likely that we have peaked out. Part of the CPI calculation is based on lagged housing-related costs and these have subsided, yet they remain high enough that hitting anything close to the 2 to 2.5 percent target range will not happen for quite a while. Keep in mind that inflation is caused by the money supply relative to productivity, with a one- to two-year lag, so we are paying for excesses initiated over two years ago and we can’t stop inflation on a dime.
EXECUTIVES