Digesting inflation.

in inflation •  8 months ago 

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Bullish case for Biden assuming consumer sentiment keeps recovering as inflation subsides. These authors find there's a bit of a lag with inflation on consumer sentiment such that prior inflation's effect on consumer sentiment decays at about 50% per year.

They estimate that most of the effect of the pandemic inflation on consumer sentiment should be gone by the election. Since the time of this forecast, projections of 2024 inflation have reduced further, so it may be even narrower than 8 points if the forecast holds.

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