I'm pretty sure when Powell says inflation will be transitory, he means that inflation will spike and then subside to normal, positive levels. He's not saying inflation will be higher than desired, but then will drop below the intended target. So yes, prices are not coming back to pre-covid levels, but the current inflation spike should ease next year.
Now, I'm not saying I personally believe that, but I see a lot of folks twisting his words and it's getting tiring. Happy to be proven wrong if someone can show me a quote from him where he contradicts my interpretation of his comments.
Central banks do inflation rate targeting. So for them "inflation" is the speed of inflation.
Why do we not have price level targeting aka perfect price stability? (targeting the CPI index to always be at 100) Because we don't have negative interest rates.
A slow down in the rate of inflation is considered disinflation.
Yes, because it goes (made up numbers) from 2% to 5% and the back to 2%; it was only momentarily 5%, it was transitory, and it passed.
If you're driving through some country roads at 60mph you might have a transitory period where you pass through a 30mph section by some little hamlet; when you resume 60mph you're behind schedule (if you planned not expecting the 30mph section) sure, but you're still moving at 60mph again.
yeah i know what transitory means but if supply chains are going to continue to have issues than the prices will continue to increase… and printing money will only make it worse since it adds demand but doesn’t help supply
Now, I'm not saying I personally believe that, but I see a lot of folks twisting his words and it's getting tiring. Happy to be proven wrong if someone can show me a quote from him where he contradicts my interpretation of his comments.
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