The Inflation “Cycle” Looks Unusually Hot

We already know that the recent inflation surge is still accelerating, and that it’s likely to heat up further in the months ahead as effects from the Ukraine war begin to factor into the data. One question that comes up is whether some or most of this pricing pressure is noise or signal? For some perspective, let’s estimate the inflation “cycle,” based on a simple estimate that attempts to capture the longer-term ebb and flow of inflation.