This piece follows from my previous two-part post: “High Inflation: Where Did It Come From, Part I and Part II.” Basically, that was an attempt to debunk some typical narratives about the sources of our current high inflation numbers, and to come up with a reasonable story that allows us to sort out monetary policy for the immediate future. The conclusion is that pandemic inflation is due to deferred consumption, and a symptom of that was a surge in holdings of transactions balances. If we take that symptom as critical, then its important that the surge is going away. Thus the resulting inflation surge is indeed temporary, and it may be unfortunate that the Fed has changed its mind and decided its not.
I am a new reader trying to get sorted on economics at the macro level after an intro/intermediate sequence.
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