That inflation (ie the general price spike that resulted from supply shocks and massive cash stimulus) was transitory. It was the most predictable, and predicted and well understood general price spike in history, and it subsided long ago.
Now you still have a ton of excess liquidity sloshing around, AND investors are rebalancing and doing some profit taking, and the FED has lowered rates (because reasons) AND you’ve got tariffs in place. And all those things are inflationary.
On the other hand, you’ve got AI, which is probably very deflationary once it gets entrenched enough to really see the effects at scale, but we don’t know how long that is. ERP+CRM took about 7 years to destroy routine back office work, but got a big assist from the GFC. So, inside 10 years?
But multiple things can be true at one time. And inflation is never evenly experienced across the economy anyway. Was inflation actually low before 2022? For example, decades of artificially low interest rates and tax stimulus, especially post GFC, essentially financed an acceleration of asset prices (like homes) with public debt, but we didn’t experience it as a general price spike because wages stayed flat* during that time and thus consumer prices for necessities were suppressed. But that’s an artifact of measurement, not a lack of monetary inflation.
Anyhow, the people who said it was transitory weren’t wrong, it wasn’t ever in question. Everything is transitory. That’s not the right question. The right question is where are we now.
We’ll see.
* mainly because the people at the very top of the economy kept more of the productivity growth and already owned more assets, while the people below the top technically received compensation increases but they mostly get diverted to healthcare costs, which in turn increased the valuations of companies in that space.