During an interview on Bloomberg TV on Thursday, Under Secretary of Commerce for Economic Affairs Jed Kolko responded to a question on whether we’re moving to a regime of sustained high inflation by stating that it’s “too soon to tell what the long-term picture for inflation might look like” and acknowledged that core inflation “has stayed steadier in recent months.”

Co-host Katie Greifeld asked, [relevant exchange begins around 1:42:49] “And so, slower, sustainable growth, and we know that the labor market remains strong. And amid all of that, we still have very sticky inflation. I know we’re not quite at 9%, but still, a six-handle is something to get worried about. But is it possible that we’re shifting to a regime of sustainably higher inflation?”

Kolko answered, “I think it is too soon to tell what the long-term picture for inflation might look like. Certainly, consumer inflation expectations farther out are still in a more comfortable range. We’re at a point right now where some of the gains from inflation, some of the declines in the rate of inflation, are coming in areas that are particularly important for consumers. The fact that gas prices aren’t rising the way they there were last year, hopefully, we’ll see more relief on food prices. These are things that consumers watch very closely and are tied to consumer confidence. Though, of course, what the Fed watches is core inflation that excludes food and energy. And that’s a number that has stayed steadier in recent months. And that’s what we’ll all be watching, including tomorrow, when [the] PCE — the Fed’s preferred inflation index — comes out.”

He added that declines in food and gas prices will have spillover and that there will be positive developments in the housing sector on core inflation and that some non-core sectors, such as energy, “are always a wild card.”

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