January 04, 2023

U.S. Inflation is Peaking. What’s Next?

July’s release for both headline CPI and PCE inflation made new highs, and many pundits are calling for a structurally higher inflation regime. We do not agree. Numerous leading indicators suggest that inflation is in a peaking process. Nevertheless, important questions remain. How quickly will inflation moderate? Will the Fed be able to shift gears fast enough to avoid a recession? We tackle these questions by separating inflation into supply-driven and demand-driven components. Read today’s report for the answers.

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