Slow Boring

Share this post
What's going on with inflation?
www.slowboring.com

What's going on with inflation?

A soft landing, if you can keep it

Milan Singh
Jan 21
69
121
Share this post
What's going on with inflation?
www.slowboring.com

Inflation! It’s been the dominant economic story of the last two years, and there have been some mixed signals in recent months about where things will go from here and what the appropriate course of action for policymakers is. So today I’d like to break down where things stand now, the arguments for both dovish and hawkish policy, and where things might go from here.

To (very) briefly summarize the last two years of economic news, Congress passed several major stimulus bills in 2020 and 2021 due to fears of a pandemic-induced depression and of repeating the mistakes made after the 2009 financial crisis. Separately, the Federal Reserve decided that they had been underrating the full employment part of the dual mandate while overreacting to the risk of inflation and decided to adopt the “flexible average inflation targeting” (or FAIT) framework in their 2020 review.

Prices began rising in early 2021 and have continued to do so since. Dovish observers argued that this inflation was tra…

Keep reading with a 7-day free trial

Subscribe to Slow Boring to keep reading this post and get 7 days of free access to the full post archives.

Already a paid subscriber? Sign in
© 2023 Matthew Yglesias
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing