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Another Reason Inflation May Be Here to Stay
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Those making the case that price rises are transitory frequently point to the lack of much inflation in services. Services inflation seems reasonably under control, suggesting to economists in “Team Transitory” that rising prices are the unpleasant hangover of Covid-19 disruptions, and inflation should go away by itself.
The story is powerful because there was a genuine switch in spending from services to goods during lockdown. This has combined with supply-chain problems to push up goods prices
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