Inflation Decline and Sticky Inflation

The podcast episode highlights the decline in inflation over the past year, but the speaker believes it is too early to declare victory. Despite wage growth slowing down, the tight labor market and worker reluctance to accept low pay increases suggest that wage inflation will remain high relative to the Fed's 2% target. Additionally, there are inflation pressures in the medical care sector, even though the CPI currently does not reflect it. Overall, the pace of disinflation is expected to slow down, potentially keeping inflation above the Fed's target.