It’s been quite an adjustment. Inflation had been averaging 2% or less from 2007 to 2020. You could say that the experience of low inflation had become “entrenched.” Some said inflation was dead. The worry was that we couldn’t get enough of it.
When people become used to something for a long period of time, it can be difficult to process and accept that a change is actually happening. You know: shock, denial, anger, bargaining, depression, etc. Consumers and capital markets are showing signs of all of these things.
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