IS HIGH INFLATION THE NEW NORMAL?

URING THE SECOND half of 2021, economists debated whether inflation in the U.S. would be “permanent” or “transitory.” Inflation hawks argued that massive fiscal and monetary stimulus was the obvious cause of price hikes. Inflation doves replied that rising prices were primarily due to pandemic-related supply chain disruptions. In early December, the debate suddenly shifted: Federal Reserve Chairman Jerome Powell told legislators, “it’s probably time to retire that word”——and the hawks took