America’s Inflation Risks

From project-syndicate.org

It was inevitable. Another upturn in the US inflation cycle is at hand. Since the Great Disinflation of the early 1980s, when the annual increase in the Consumer Price Index (CPI) plunged from 14.7% in March 1980 to 2.4% in July 1983, inflation has generally remained in a relatively narrow 1-5% range for a quarter-century. When the economy softened, inflation slid to the lower end of that range, and when it strengthened in the late 1980s, late 1990s, and in the pre-crisis 2000s, it moved to the upper end. Such is the case today. Not surprisingly, this pattern has been slow to emerge in the current cycle, largely ... (full story)