The Limits of Micro-Inflation

The recent CPI print came in hotter than expected pointing to broad based inflation. Corporations are passing costs on, and corporations have passed through a lot of cost to consumers as Liberty Street economics highlighted. Labor market is still tight as evidenced by jobless claims. And also rents are confusing as a part of the CPI. The people who previously had to spend their ample nominal incomes on overcoming X will simply put those incomes towards Y2 sector.