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It was 73 degrees and sunny in #JacksonHole, Wyoming, today; a perfect day for all those who were there….
Yet, there were no #monetary policy officials present at the traditional location of the @KansasCityFed’s late-summer #economic policy symposium, since they were conducting a “virtual symposium.”
That symposium provided #ChairPowell the opportunity to lay out a reasonably sunny perspective on the U.S. #economy, but also one that was not out of the woods yet, in terms of Covid variant risk and a maximum #employment target still to be achieved.
Today’s robust #inflation data surprised in its strength and will likely persist in the short-run, and in some areas the intermediate-term, although we think that long-term the @federalreserve is largely correct in identifying real #economy price gains as mostly #transitory.
Much of today’s #inflation is due to reopening factors and supply constraints, but as #SupplyChains normalize from Covid-related shocks and #inventories rebuild, we expect much of the recent inflation will be transitory, with some stickiness in pricing pressure longer-run. 
That may be especially the case where #inventory levels are harder to build up quickly and continued #demand from higher levels of #growth persist for at least the next year, or so.
With the dust from Powell’s speech at the Jackson Hole symposium on Thu settling, the fundamentals are re-exerting themselves. As we said, a switch to average inflation targeting will drive the price of hard assets higher and USD will weaken over time.
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