Commentary
The recent ease of inflation reduces the pressure of monetary tightening. A year-end rally has begun. But if inflation is really coming down, this also means aggregate demand is weak enough for the goods market to be a buy-side market where sellers have to step back in pricing. But inflation is not coming down quickly. Instead, core inflation, such as the services component, stays high at around 4 percent without much change over recent months. The recent decline in headline inflation was largely a result of non-core components and a high base effect.
