An example is in the housing market, provided by this bit in a Wall Street Journal article centered on housing costs as a major component of our current economic inflation. The article suggests, among other things, that housing cost inflation may be abating.

If shelter inflation does drag overall inflation closer to 2%, that doesn’t mean the inflation problem is over. Economists assume increases in rents and home prices will remain subdued, given the slowing economy and high mortgage rates.

Say that the shelter inflation is easing and that it does, indeed, drag overall inflation down. Inflation is a measure of the rate of price increases, it is not a measure of prices themselves. If shelter prices stop rising so fast, the cost of shelter—rent, house purchase (and associated interest rates on those mortgage), rent/housing utilities—and of fuel, food, and on and on all will remain at their current levels; they most assuredly will not fall back.

But those prices must be paid out of a household’s income, and that income—wages and salaries—has increased only at half to three-quarters the rate of inflation. That means that in real, practical, terms, a household has less money with which to pay those costs: a larger per centage of monthly household income will be absorbed by those monthly rent/mortgage payments and those monthly household utility, fuel, food, etc bills than was the case before this inflation explosion.

That’s the failure of the Biden administration’s and Congress’ fiscal policy of throwing trillions of dollars at our economy with no means for it to absorb that money though increased production and productivity. That failure is exacerbated by the Powell Federal Reserve’s monetary policy failure in artificially suppressing interest rates for so long, and in printing dollars like the presses would run out of ink tomorrow through its bottomless purchases of Treasury debt instruments.