Supply Is Driving Disinflation
The Federal Reserve will announce next week whether its aggressive interest rate hikes will continue.
They shouldn’t continue, Roosevelt’s Mike Konczal argues on a new episode of The Indicator from Planet Money.
As his research shows, the primary driver of inflation has been on the supply side, rather than the demand side the Fed is targeting.
“A lot of the slowdown in inflation has happened basically because we’ve been completing the reopening, because supply chains have been sorted out,” Konczal explains on the podcast.
To avoid a recession, “. . . the Fed should absolutely pause, and they hopefully are going to do that.”
Read more of Konczal’s inflation analysis in his latest brief, and check out coverage of the paper in Paul Krugman’s New York Times column and Axios Macro.
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