22 August 2023
The U.S. and Europe’s decreasing CPI inflation, termed the “Great Phony Postpandemic Disinflation,” isn’t due to central bank policies but natural post-pandemic dynamics. Despite the Fed’s “success” celebrations, the dollar’s value has decreased since the pandemic’s onset. Recent monetary conditions indicate hidden inflation risks, with the post-pandemic period showing signs of asset inflation. As 2023 progresses, there’s growing concern about the return of glaring monetary inflation and the potential shift from asset inflation to deflation, exacerbated by geopolitical tensions and fluctuating trade. The Fed’s pivotal role in global financial stability remains evident.