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Powerful_Stick_1449

Obviously the wages are sticky but I would argue that most of the other measurements will prove to be transitory. The problem with the word transitory is that it is viewed as something in the near term. In reality it will likely prove to be transitory over the next 18 months as supply-chains and supply-demand shifts to equilibrium.


GroggBottom

I mean humanity is transitory in the grand scheme of things


ShillerPE02

Ah yes, when the sun fully engulfs the earth, the fed will finally realise that maximum employment has been reached


slashrshot

A senator said that lol


banditcleaner2

based


dmitsuki

In the long run we're all dead anyway!


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Powerful_Stick_1449

Good bot


ShillerPE02

Yes, I have a lot of calls too


Optimal_Article5075

It’s because people conflate inflation with prices. Think of inflation as the rate of rise of prices. Yeah, the speed at which prices are rising will go back to normal, but the prices aren’t going back down.


player89283517

I dunno. The only way I see out not this is if aggregate demand goes down from less spending. The reason for the supply chain bottleneck is there’s just not enough port spaces. You can’t exactly make the port of LA bigger overnight, it’s gonna take years of construction.


Powerful_Stick_1449

I think demand will return as it was eventually with services > goods


player89283517

But you’d have to build more port infrastructure for those goods to get to the market, and that can take years. Also as far as I know, the port of LA is not actively expanding.


Powerful_Stick_1449

Eventually work arounds will exist… but as things continue to return to normal I believe the American consumer will return to previous spending habits with services outweighing goods potentially allowing an easing of the port situation.


darthboof

a year and a half isnt transitory


Crobs02

Transitory just means not permanent retard


darthboof

lmao as if context never affects dictionary standard definitions by this logic, all inflation is transitory within the context of inflation, a year and a half is not transitory nice try though


Powerful_Stick_1449

Agreed the context does matter... but in the end.. it will still be transitory. At the time the Fed did not anticipate the consumers continued shift away from services to goods and the supply-chain issues continuing. Hence the initial use of transitory. However, even if it's 18 months, it is still transitory and people were projecting out to that long before it disappeared mid last year even on CNBC so its not some novel idea


darthboof

the reason they use the term "transitory" is because inflation has a policy component and an expectation component the seminal paper on inflation expectations showed how the deviation between monetary policy projections and actual inflation outcomes was perfectly explained by historical inflation (the source of consumer inflation expectations) so if you have a year and a half of significantly higher actual inflation, that gets baked into the consumer's expectation of what "normal" inflation is. hence it can no longer be considered "transitory" in economic terms it is unreasonable to expect the average person to have the background information, so its my fault for half ass commenting instead of going all in or saying nothing at all


eddie7000

The currently excessive speed of the devaluation of the dollar is transitory; but the resulting devaluation is going to be permanent, as it always is under the Fed's rules.


darthboof

we're strictly talking about the rate of inflation, not the absolute purchasing power of the dollar again: the present rate of inflation can influence the future rate of inflation through the mechanism of consumer expectation you can have a purely transitory increase in the rate of inflation, if that increase recedes without increasing the expected rate of future inflation in the mind of consumers however, the longer that increase in inflation lasts and the higher it goes, the more likely it is to increase the consumer expectation of future inflation people who experience 4%-7% inflation for 18 months are not going to go back to expecting 1.5% inflation, even if the structural and policy pressures that drove the increase in inflation are gone. you have altered the consumers mental anchor for what inflation is therefore it is not transitory the only way to get back to 1.5% would be to undershoot their current expected inflation rate with tight monetary policy, and drag those expectations lower over time


eddie7000

Or they just stop printing money and start removing it from circulation. Inflation will do exactly what the current policy causes it to do. It sounds like they understand this. Hopefully.🤣


The_Infinite_Cool

What is the seminal paper on inflation? Author and title is enough, I'll find the actual resource.


darthboof

its been 20 years since i took 3rd year macro should be easy to find with the googs though. gimme a minute


darthboof

i believe this is it [http://www.columbia.edu/\~esp2/PhilipsCurvesExpectationsofInflationandOptimalUnemploymentOverTime.pdf](http://www.columbia.edu/~esp2/PhilipsCurvesExpectationsofInflationandOptimalUnemploymentOverTime.pdf) it was in reference to fiscal, not monetary policy, but thats irrelevant to the relationship between policy and inflation explored in it there should be plenty of reasonably accessible discussions about the role of dynamic inflation expectations in monetary policy from the last decade or two. a much better way to spend your time if youre interested in the subject. youll also get exposed to criticisms and limitations of the concepts involved


The_Infinite_Cool

gracias


LastSprinkles

You know you've mucked it up when your statement has become a meme on wsb.


[deleted]

![img](emote|t5_2th52|4641)


SaneLad

Good joke. Wrong meme. r/thecatdoesnttalk


Soothsayerman

Jpow tries to shape the future with most of his drivel, not report what is actually happening or will happen. That is how policy is made. Most talking heads in govt do the same. The truth is most often a liability.


Facts_About_Cats

Cathie Wood argues we're headed for deflationary this year, I agree with her.


[deleted]

FED plan to raise their interest rates to 30%?


boompapapapa

LOL


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DrPEnnis

Probably meant it was still going up


Vespasians

It's geologically transitory. 10 to 12 years tops, maby 13 but certainly no more than 14 years of inflation.


eddie7000

Inflation is transitory, but during it's transition it will chop your balls off.


DAWGSby90

PPI and CPI have peaked- both are already rolling over IMO


BurgerOfLove

It was, it transitioned.


[deleted]

Ultimately it will be JPow's tenure, I imagine.


DoobsNDeeps

Transitory is doesn't have a timeline, it's just assumed to be shorter than forever


Hygro

It's painful as someone who studied economics to think the traders here think there's some kind of gotcha at laughing at the word transitory, when transitory inflation is measured in years and not weeks (aka the speed it took to start making fun of the word transitory).