After months of teetering on the edge, it seems inflation is declining steadily, to the point where the specter of mega-price jumps erasing savings and putting families at risk of destitution is fading, with the Consumer Price Index falling from 4% to 3% last month.
The Federal Reserve is taking a victory lap here, and they deserve some credit, though the extent to which their dramatic rate hikes were the driving force in cooling inflation is arguable; they had an impact, no doubt, but the resolution of a number of supply chain issues has potentially been the most significant factor, one that the central bank has little control over.
For them to be still on the rate hike war path is concerning, given the extent to which there is agreement — though obviously not consensus — in the economics sphere about the likelihood that we will be achieving our coveted soft landing has risen substantially, to the point that keeping a hand on the throttle might make us miss the runway in a catastrophic way.
