Will inflation continue to come down?


A lot of signs, including Wednesday’s consumer price index, are pointing to the idea that inflation is easing. It was 3% year over year in June. That’s partly because some of the sectors that have seen the most overheated price jumps have cooled down.

It’s been a long time since we’ve heard the phrase “transitory inflation.” Federal Reserve Chair Jerome Powell decided the label wasn’t so accurate in late 2021. But Moody’s Analytics economist Mark Zandi thinks the T-word is still the right way to describe this period.

“Certainly didn’t feel that way because it’s taken a long time to work through those effects because those shocks were so massive and they were global,” Zandi said.

He was talking about the pandemic supply chain snarls, which affected the cost of goods, and the initial impact of the war in Ukraine, which affected the cost of energy and food. These played an outsize role in inflation but have largely subsided.

“We’re probably two-thirds of the way there. And that last third is going to take a bit of time, I think,” Zandi said.

Part of what’s left in that last third includes the transitory category that’s come to define this time: used cars.

Omair Sharif is president of Inflation Insights. “It has had such a …

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