The Inflation Scare Doesn’t Match Reality

The Inflation Scare Doesn’t Match Reality

The 2021 Inflation Scare is another in a series of false alarms going back several decades. It may not quite qualify as Fake News, but it is close. Start with this Plain Fact: Inflation has disappeared from the U. S. economy. The Core Consumer Price Index has not exceeded 3% since 1995. Inflation Missing for 25 years? No American consumer under the age of 50 or so has ever had to make an adult economic decision in the context of significant inflation. (At my university, it is a struggle to get students to imagine what inflation would feel like. It's like asking them to conceive of a world where their phones would have to be permanently tethered to the wall by a cord!) Another Fact: There is no sign that Inflation is coming back: Nevertheless, much of the media still spins the story in the traditional way. Including the WSJ editorial page. To support their recent claim that inflation has already "arrived," the Journal cited what they called a "pop" in Treasury bond yields. This frightful "pop" amounted to 4 basis points. 4 one-hundredths of a percent. (Since that financial amber-alert, Treasury Yields have actual fallen by more than twice