Why Is Core Inflation So Low Compared to Previous Business Cycles?

The Consumer Price Index Less Food & Energy (Core CPI) is very low compared to previous business cycles in the US, for several reasons:

– not fast-rising money supply
– globalization: inflation is a global phenomenon
– lack of wage acceleration
– increase in the labor force participation rate

Image: Blackrock

Consumer Price Index Less Food & Energy (Core CPI) 1953-2019