Quote:
Originally Posted by The Fonz
So over the past year (since peak), we're averaging a .5% drop per month. It'll be interesting to see what happens over the next 3-6 months, and if they can level it off around 1.0-2.0%.
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That's very unlikely, for a couple of reasons:
1) With mortgage interest inflation adding ~1% to the headline number, we'd have to essentially have the other 96% of the basket be in or near deflation to hit those numbers.
2) On top of that, we have already had about 2.7% inflation (actual, not annualized) through the first 6 months of 2023. So even if we see zero inflation for the rest of the year, we'd still be in the 2.5-3% range. Now inflation is extremely seasonal, so having ~0-0.5% inflation in the 2nd half of the year would be totally normal and expected. But going negative enough to bring the year-over-year number down to 1-2% would be pretty abnormal, particularly with such high mortgage interest inflation baked in already.