Blog: Some Good News on the Inflation Front

I often feel like I'm Doctor Doom these days. So I'm happy to report some good news. You probably noticed that while most analysts have credited the Fed rate hikes with bringing down inflation, I haven't been convinced that's the case. The drop in both headline and core measures of inflation appear to be largely tied to a restored supply lines. This has finally removed the "transient" part of inflation that the Fed and other central banks had hoped would be gone a couple of years ago. But as I mentioned in "The Powell Diet," the inflation rate reduction so far has been the easy part. It's not the reduction in demand that's supposed to come from higher interest rates. So what's the good news? It looks like what's left is more of what the Fed can influence. Unfortunately there's bad news too.