The U.S. no longer has an inflation problem, according to veteran economist Steve Hanke.
"When inflation was going and roaring, the producer price index roared up first and then the consumer price index roared up. And then finally the core gradually like a snail went up," said Hanke.
"Now, we've turned the thing around and the producer price indexes are falling like a stone. The consumer price index, it's falling pretty much like a stone. And the core is lagging way behind," he said, adding:"We'll see all of that come down as long as they continue with quantitative tightening." Central bank policymakers tend to look more at core inflation, which is still running well above the Fed's 2% annual target.
But Hanke noted that if the Fed continues"to keep doing what they're doing," it can reach the"2% range pretty fast." "Forget all the propaganda we're hearing — that the chairman of the Federal Reserve has a tough problem, that this is going to be a long fight, things are sticky and so forth. Things aren't sticky," noted the professor.
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