Blog: Complacency - What doesn't kill inflation gets ignored.
Entrenched inflation expectations are what the Fed's trying to kill. So far, no luck.
Now that the debt crisis is past, the markets are acting like the worst of everything is also behind us. It seems that CPI inflation of 4.96% and PCE inflation of 4.36% are just fine with everyone. Fed Chair, Jerome Powell, saying a rate hike pause may be in the offing is taken as the end of this cycle of rate hikes. The market believes inflation will eventually slide back to the 2% target of its own momentum, maybe years from now. But that's OK. Employment and the economy are still strong, so the soft landing has been achieved. Crisis over.
If only it were that simple.
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