In the #News #Economy #Politics - The Inflation Narrative

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― Mark Twain

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Taming Inflation Narrative

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Win-win for Trump, or is everyone drinking the same Kool-Aid (delusional)?

Let’s ask the only opinion that matters, A.I.

Copilot’s response,

The current U.S. inflation rate is 3.0% for the 12 months ending January 2025. This marks a significant decline from the peak of 9.06% in June 2022. While inflation has eased considerably, it remains a factor to watch as it still impacts purchasing power and economic decisions.

Grok’s response,

Whether inflation is falling depends on the region, timeframe, and specific economic indicators you’re looking at. Globally, inflation trends have been mixed since the post-pandemic spikes, with some countries seeing declines while others continue to grapple with rising prices due to structural issues, energy costs, or currency depreciation.

In the U.S., for instance, inflation peaked around mid-2022 at levels not seen in decades—think 9% year-over-year on the Consumer Price Index (CPI)—driven by supply chain disruptions, labor shortages, and energy price shocks after Russia’s invasion of Ukraine. Since then, it’s cooled somewhat; by late 2024, CPI growth had moderated to around 3-4%, thanks to aggressive Federal Reserve rate hikes and easing supply constraints. Core inflation, which strips out volatile food and energy prices, has also trended down but remains sticky in some sectors like housing and services. So, yes, in the U.S., inflation has been falling relative to its peak, but it’s not back to the Fed’s 2% target yet, and month-to-month fluctuations still happen—some months even show slight upticks.

Globally, it’s a patchwork. In the Eurozone, inflation has also eased from double-digit highs in 2022 to around 2-3% by late 2024, with the European Central Bank cutting rates to support growth. But places like Turkey or Argentina are still wrestling with extreme inflation—50%+ and 100%+, respectively—due to policy missteps and structural woes. Developing economies often face imported inflation from a strong U.S. dollar, which hasn’t helped.

The trend isn’t a straight line anywhere. Energy prices, geopolitical risks (like Middle East tensions), and domestic policy shifts keep things volatile. Plus, wage growth in some regions is putting upward pressure on prices, even as goods inflation cools. If you’re looking at real-time proxies like commodity prices or shipping costs, they’ve softened overall since 2022, but disruptions—like Red Sea shipping attacks—can still spike costs temporarily.

So, broadly speaking, inflation has been on a downward trajectory in many major economies since its recent peaks, but it’s not a universal “fall.” It’s more like a bumpy descent with plenty of turbulence. Where exactly are you looking to focus? That’d help me narrow it down.

Our thoughts about A.I.’s responses,

The invisible hand is saying inflation is still hot.  Only a bone-crushing recession relieves the red box from the inflation oscillator below.  Think any sitting Administration is willing to suffer through a bone-crushing recession?  We’ll see.

Follow me on ð• or Facebook for further discussion.

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The Matrix provides market-driven trend, cycles, and intermarket analysis.

Source: http://www.edegrootinsights.com/2025/03/in-news-economy-politics-inflation.html