Importunate Inflation

In March and April, the CPI was above 8% Y-o-Y. Since 1950, this has only occurred in 1951, 1974, and 1979-1981. Inflation this bad is rare. Fortunately, it will probably decline to 4%/year by mid-2023 as supply problems ebb and energy prices plateau. The problem, if wage inflation remains stuck at 6% and productivity growth remains 2%, inflation stays at 4% and the Fed keeps raising rates. Watch wage growth.