There is no question that the 5.4% rate of inflation in the U.S. may come down as some of the factors leading this rate will drop. The semiconductor chip shortage is unlikely to last forever, and used car and rental car prices are almost certain to fall, as are other inputs leading the to current rate of inflation.
But in addition to the Fed's money printing, the following are all factors that will lead to persistent inflation, well above the Fed's 2.0% target
Green regulations will lead to suppy squeezes in oil, natural gas and key raw materials, including silver, and increase the costs of production for many manufacturers. Inflationary carbon taxes may also be coming down the road.
Global Weather Weirdness is leading to crop failures around the world. Drought and wildfires in California, frost in Brazil, and flooding in Europe and Asia are on the verge of creating food shortages. Global weather weirdness is not going away. The cost of food is going to continue increasing at a significant rate.
Wages in the U.S. are rising. The current labor shortages may or may not be transitory, but ongoing increases in the minimum wage are persitent and sticky.
The widely accepted myth that inflation is transitory will be proven to be wrong over the next 12 months. It may be elevated, but it is not transitory.
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