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Matthew A. Winkler

Inflation Alarm Bells Are Actually Getting Softer

Even as prices remain stubbornly high and pessimism haunts the political stage, the activity of consumers, economists and investors predicts that US economic stability is not so far in the future.

This is not an economic indicator.

This is not an economic indicator.

Photographer: David Paul Morris/Bloomberg

The release on Wednesday of the latest Consumer Price Index data just confirms what everyone already knows: that inflation is hovering at a 40-year high, seemingly out of control. The 9.1% June inflation rate and similar metrics help explain why consumers say they’re gloomier than at any time since the 2008 financial crisis, why the Federal Reserve has made credit the tightest since 1994 and why President Joe Biden keeps sinking in public opinion polls.

But a less conspicuous set of inflation metrics deserves attention, too. Far from ominous, it shows that consumers, economists and investors anticipate a gradual return to stability and moderation.