• catchy_name@feddit.it
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    8 months ago

    Seeing the CPI plotted over time helps to get a clearer feel for how it is changing:

    https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm

    Based on that chart, things don’t look as dire as the cited “~20% since 2020” stat. Yeah, we’re all still feeling the effect but it seems that the rate has dropped into normal-ish territory. Now the questions are “How close are businesses to really feeling the hurt of the lack of cheap borrowing?” and “If/when we drop interest rates how much immediate effect will that have on inflation? How much can we drop it without really spiking inflation again?”

    • pancake
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      8 months ago

      Yes, you are right, but during most of that time, interest rates neared zero. I like to plot the sum of YoY inflation and interest rates since it is more stable and gives a feeling of how much headroom there actually is.