What you're not hearing about the highest CPI in 39 years

Powell has retired the term "transitory," but even at 6.81% year-over-year, inflation is indeed transitory. It remains explained entirely by three components. The largest, motor fuels, is highly unlikely to contribute to future inflation as it has in the past. Rents, the largest component of CPI, lag housing prices, so they will contribute more -- but computationally the effects are trivial. The worst CPI print in 39 years dooms Senate passage of Build Back Better this month, and next month is too late as it is the beginning of the mid-term election year. The White House claims BBB will mitigate inflation, but man-at-the-margin Manchin disagrees. A year from now, transitory inflation will have disappeared, and BBB -- with its trillions in new taxes -- will not have been enacted.