Inflation expectations are still high

 

Inflation won't be tamed in the near term. First, CPI is staying above 3%, not 2%. Second, the PPI isn't showing support for lower inflation. The PPI is usually volatile, but commodity prices are rising with greater volatility.

While longer-term inflation expectations suggest inflation could get closer to the 2% target, one-year expectations aren't falling toward 2% and are centering around current levels above 3%.