.#ConsumerPriceIndex data for the month of August revealed further recovery - like a lot of #macro data in recent months: core #CPI (excluding volatile food and #energy components) came in at 0.4% month-over-month and 1.7% year-over-year.
Overall, we think 2020’s broadly #deflationary influences may well lead to somewhat higher rates of #inflation by mid-2021, yet importantly, we do not expect this to reach excessive levels.
Those fearing increasingly greater risks of high #inflation stemming from #crisis rescue measures are misguided, in our view, and underestimate the continued secular headwinds to excessive #price increases…
Those forces include #technological disinflation and #demographic trends that should prevent any repeats of long periods of excessive #inflation.
That said, one concern we do have is whether higher-than-target #inflation should really be a @federalreserve goal, given the negative impact on #consumers, and especially lower- to middle-income households in a world where the #cost of living for many is coming down?
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