Every time the Federal Reserve comes up with an excuse for raging inflation and why it won’t last, the data knock it back down.
Inflation hasn’t turned out to be temporary and has accelerated, reaching the highest in a single month since January 1990. It is high even when measured against pre-pandemic prices, so this isn’t merely catch-up for the deflation of last spring. It is no longer merely about a narrow set of Covid-disrupted supply chains, or demand for used cars and other popular items. Even the get-out-of-jail-free card of FAIT, the Fed’s year-old policy of flexible average inflation targeting, is wearing thin.