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Niall Ferguson

Nobody Knows How Long Inflation Will Last. That’s Life.

Large social networks are what separate human beings from all other animals. They are also why we live “on the edge of chaos.”

Tornado warning.

Tornado warning.

Photographer: Ina Fassbender/AFP/Getty Images

Have we just passed peak inflation? That was the question economists were debating last week, when the US Labor Department published the latest consumer price inflation rate. The index in June was 9.1% above the level a year before — the highest figure since December 1981.

Is that the top? We are all entitled to guess, of course. But the idea that the average economist could know the answer to this question is laughable. Only a handful — former Treasury Secretary Larry Summers, most famously, but also my Hoover Institution colleague Michael Bordo and my old friend and fellow Bloomberg Opinion columnist Mohamed El-Erian — correctly foresaw in early 2021 that inflation was about to take off. And even they didn’t venture to predict that inflation would exceed 9% by now.