Short-term inflation depends on long-run goods

Short-term inflation depends on long-run goods

For decades, Americans have enjoyed plunging prices of cars, electronics, and furniture.

Till the Covid-19 pandemic, that is. For the past year, the prices of durable goods have been rising – and not just by a little bit. Whether those prices return is an important piece of the puzzle facing the Federal Reserve as it figures out how to handle an unexpectedly strong burst of inflation.

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