Fiscal Feebleness

In 2021, fiscal policy added four percentage points to GDP, in 2022 it will subtract three, a seven-percentage point swing, something not seen since at least 1960. Moreover, the dollar is at its strongest level in decades, further reducing inflation. Add peaking new car prices, falling used ones, rising factory utilization rates and inventories, and flat real spending on goods, and goods inflation may recede much more quickly than expected.