Inflation Is Already Here—For the Stuff You Actually Want to Buy

The pandemic provided inflationary pressure by restricting supply, so when demand rose—for example, for eating out as the lockdown eased—prices rose sharply. And because Covid-19 has intensified the U.S.-China trade war and the trend toward deglobalization, supply could be constrained for a long time.

The pandemic also creates deflationary pressure, hitting demand as people socially distance, leading to job losses and corporate cutbacks.