Quote:
Originally Posted by 2000cs
On the question of whether inflation has peaked, I would want to look at where prices are up specifically, to judge if they are done or continuing. For example, oil being up means plastics, gasoline, diesel, propane and natural gas will be up. That means any product that uses these as inputs, or for transportation/delivery will be up. This is a cascading inflationary pressure so the oil increases will percolate for some time. Oil, by the way, appears to have peaked, but its effect has likely not.
On the other hand, an increase in finished products, like food and furniture etc, would not percolate except to the extent those increases are so wide-spread that they result in wage increases, and the percolation begins anew.
My sense is inflation has probably either peaked or is near a peak, especially with the Fed focusing on it again. But I think it will remain near current levels for some time as the effects discussed above work their way through the economy.
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Inflation is like compound interest except in reverse, the principle keeps going up.