Simply Services

Inflation, as calculated by the Fed’s favorite measure Core-PCE, was 3.54% Y-o-Y in June, up just marginally from 3.44% in May, suggesting that Peak Inflation is probably here. A key reason inflation isn’t worse, unlike other recessions there’s little pent-up demand for goods but lots for services. However, you can’t eat all the restaurant meals you missed during lockdown. Thus, the current pent-up demand for services is immediate but limited.