Inflation regime
Inflation
What it is
Diagnosis of the current inflation trajectory: confirmed disinflation (decline confirmed), slow disinflation (declining but sticky), persistent (stagnant above the 2% target), or re-acceleration. Built from core CPI and inflation expectations.
How to read it
The inflation regime determines coming monetary policy, hence rates, hence valuations. Disinflation = likely rate cuts = bullish for long-duration assets. Persistent or re-acceleration = rates held high or raised = headwind for growth and long-duration bonds.
Common reference points
- Confirmed disinflation — Fed can ease—
- Slow disinflation — easing delayed—
- Persistent — Fed stays hawkish—
- Re-acceleration — hike risk—
Orders of magnitude, not a rule: the same number does not mean the same thing from one sector to the next.
What it does not tell you
Official inflation (CPI) sometimes underestimates lived inflation (housing, services). Regimes can flip quickly on an energy shock or cycle turn. Watch monthly, don't freeze.
Other measures — Macro
Educational content. Polaris is not a registered investment adviser and makes no recommendation.