Inflation Bulletin

March 2023 quarter data have been released. Time for an update.

You will recall from my previous quarterly review of inflation, detailed here, I noted that the growth in the money supply must be reversed before inflation is contained. The key leading indicator of inflation is growth in the money supply. Growth in producers’ prices then follows and finally leads into growth in consumer prices.

My tracking of these three data streams is shown here, updated to the end of the March quarter.

Growth in all three measures continues. The implication is that general inflation is not going away. In fact it will continue. Until the money supply growth rate drops to zero, or better still turns negative, the end result on the CPI can only be more increases.