Yes. It’s non-monetary, narrowly based, and not supported by expectations.
What you're not hearing about the post-pandemic economy: the coming boom, and the threat to it
Monday, October 18, 2021
We're in a post-war boom, a double-dip expansion -- and the threat of an inflation that will derail it is bogus.
Update to Strategic View
At record real GDP as of Q2-2021, there are still as many jobs to fill as at the trough of Q2-2019. Having already completed a V-shaped recovery from the pandemic recession, we are now poised for a double-dip expansion. Q3-2021 will be a slowdown relative to Q1 and Q2, but still strong by historical norms. Inflation is not a threat. It is more than explained by just three items among hundreds in the CPI basket, showing it is not a broad-based monetary phenomenon. Supply chain breakages are healing already; but the existing problems are fully reflected in prices, and they'd have to get worse to produce steeper inflation. Wage growth is higher than normal, but falling. Enticing workers from unemployment increases production, meaning more money is chasing more goods with no inflationary consequences. Market-based and survey-based expectations are unexceptional, pointing to no self-fulfilling prophecies that could spark at true inflationary spiral.