Bob Elliott
· Nonconsensus
· February 13, 2026 at 11:34
· ⏱ 3 min read
| Read on Substack ↗
Summary
=== SUMMARY ===
•The primary driver of recent inflation, tariffs, is now fading, which is a significant disinflationary force.
•With underlying inflation in key areas like rents and prescription drugs also cooling rapidly, the path is clear for inflation to reach the Fed's 2% target by early next year, giving the Fed ample justification to maintain easy monetary policy.
Summary
The author argues that after years of elevated inflation, underlying economic pressures are now shifting in a way that will likely bring inflation back down to the Federal Reserve's target. This is a significant development as it would remove the main obstacle preventing the Fed from implementing easier monetary policy.
•Underlying pressures are now aligning to bring inflation back to the Fed's target.
•Persistent, above-target inflation has been the primary reason holding the Fed back from easier monetary policy over the last year.
•A return to target inflation would make it easier for the Fed to pursue a more accommodative policy stance.