With inflation in the United States now more than double the Federal Reserve's stated target of 2% inflation, economists have been at odds on whether this is 'transitory' or just the beginning of a new monetary trend. With the vast majority of the developed world instituting economic lockdowns and massive government stimulus to combat the COVID-19 pandemic, it makes sense that this would fuel inflation in modernized countries with just-in-time supply chains, negligible spare capacity…and then sudden injections of massive stimulation from governments.
There is one country that stood alone bucking the global trend—Sweden. Sweden did not mandate shutdowns or lockdowns and consequently saw no need to over-stimulate the Swedish economy since everyone was still working. Now Sweden's services inflation level is about 3 percentage points less than the U.S., and within its "normal" range.
The $64,000 question: will the US follow suit and see its inflation decline, or will the massive current and proposed stimulation continue to generate unmet demand and consequent inflation?