|transitory inflation definition||1.21||0.1||9269||28|
Transitory inflation, in this sense, has a long-lasting effect on the price level. Inflation is 2 percent prior to time 1. It is 2 percent after time 2. But transitory inflation from time 1 to time 2 causes the price level to increase, permanently. Transitory inflation need not imply a permanent increase in the price level.Is the term “transitory” transitory?
The use of the word “transitory” could very well turn out to be transitory. Powell may need a new catchphrase to describe how inflation might be a bit stickier and thornier problem. Wages are rising and so are bond yields. The housing market is still chugging along.What are the two questions to ask about transitory inflation?
There are two important questions to ask about these statements. How long does “transitory” mean? And how one would one know if more broad-based inflation has taken hold?Will inflation be temporary?
One reason Powell has said he thinks the inflation pressures building in the U.S. economy will prove temporary is that, for now, most Americans don't expect prices to rise much in the long run.