The title is correct. But what is the probability of a significant inflation hike going forward?
The USA and the vast majority of rich OECD countries have enjoyed low, stable inflation rates for the past decades. This despite bouts of hyper-stimulative monetary policy and periods of expansionary fiscal policy.
What is about to happen that has not happened over the past 2 decades? President Trump talks about America first and border adjustment taxes because Americans do not understand value-added taxes (VATs) but is he willing to reverse trade and make the USA autarkic? Most unlikely.
So what is going to change going forward that would spur inflation higher?
This is a key question for those of us who own capital-intensive companies like utilities and telecom companies.
Those notes from ECON 101 that date from somewhere in the 1960s to 1980s provide absolutely no help whatsoever. Why? Because all that theory is utterly incapable of explaining the low, stable inflation rates of the past couple of decades.