Inflation already back down to 2% target according to “instantaneous inflation” calculation

This is, like, a new category of hopium

The price remains high, it just stopped growing

This is a good game. Let us leave reality behind and eat the desserts and cakes of our dreams.

The main measure of inflation, the CPI, is normally calculated as a 12-month average of monthly price/inflation data (an oversimplication, see linked paper for details). This is to smooth out variations and errors in data collection, mainly. As a result it is a trailing indicator of inflation.

[Instantaneous inflation](https://www.janeeckhout.com/wp-content/uploads/Instantaneous_Inflation.pdf) is instead a measure of spot inflation at the moment. It is more susceptible to distortion from variations and errors in data collection, but also provides a more immediate view of current levels of inflation.

Current data shows instantaneous inflation is already around the Fed’s target 2% level. Returning to this level of inflation is a necessary (but not sufficient) pre-condition for another Bitcoin bull run.

Huh?

So when will my rent or my grocery bill go down again?

My grocery bill disagrees.

Inflation running at an average annual rate of ~1.8% looking at the last six months of data, but was running at ~11.6% in the six months prior(!).

Interesting the bitcoin price spike occurred pretty closely after the latest CPI print came in and expectations of future interest rate rises came down.

It’s very simple as long as they keep printing money and thus increasing the monetary base inflation will be high.