It’s really looking like a soft landing:
I still automate this graphic but took it out of active circulation, but it is worth sharing. We focus on 3-, 6-, and 12- month changes for good reasons, the monthly data is noisy.
— Mike Konczal (@mtkonczal) December 22, 2023
But look at the sharp drop-off in monthly this year. It's a giant cliff, and it's just wild. /2 pic.twitter.com/Nr8xmgxCwL
There were two stories for how to get disinflation:
— Mike Konczal (@mtkonczal) December 22, 2023
– a reopening supply-side story like the late 1940s and early 1950s
– an inertial 1970s and early 1980s one.
We can look at what we just went through and see how we matched up. It looks *shockingly* like 1948 and 1952. /4 pic.twitter.com/CbVRVhxEte
To see the inflation vibes shift, contrast now to predictions a year ago. Furman:
— Mike Konczal (@mtkonczal) December 22, 2023
"Soft landing, at best a 10% chance [..] most likely [2023] scenario is we have a mild recession, it brings inflation down, but it brings it down to something like 3.5%." /6 https://t.co/8ozaXVvM6m
I understand why everyone is nervous, even I am. But the reality is that the inflation picture has shifted dramatically, exactly as a 'soft landing' and the experience of reopenings predicted.
— Mike Konczal (@mtkonczal) December 22, 2023
It's time for the Fed to balance its mandates now, lest it blow this historic win. 8/8