US inflation bubble begins to pop

It began with lumber prices a few weeks ago and it is now broadening out. Charts from Daily Shot. Goods prices are deflating as services catch up to normal levels:

Core PCE has peaked:

It’s mostly catch-up anyway:

A long way to fall:

Post-GFC saw the same panic:

Panic fading:

Structural inflation takes structural change:

Labor ain’t doin’ it:

And supply-side labour shortages are now easing:

In some ways, inflation killed inflation:

Just wait until commodities bust as well. 2022 is going to be the year of deflation:

2023 shapes as the next of inflation challenge as fiscally-led US growth takes off from a tight labour market. But that’s good inflation and bring it on.

Houses and Holes
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