Inflation Cherry-Pickers Can't Drown Out the Noise
Price pressures are a problem, or not, depending on what you look at. Choosing your criteria first and sticking with them sifts out the bias.
Choose them first, then stick with them.
Photographer: Scott Barbour/Getty Images
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We’ve just published the latest update of the inflation indicators. In a nutshell, they show a steady but not overwhelming broadening in price pressures, with bond markets still more or less unconcerned, while economic experts polled by Bloomberg remain more anxious about the prospect of deflation. A rise in wage inflation and continuing pain from producer price increases, which might be exacerbated by fresh Covid-related bottlenecks, are causing the greatest immediate concern. People who argue that this inflation is transient and those who think it’s a secular trend both still have plenty of evidence. The debate remains open.