Economist Lacy Hunt offers a sobering look at the long-term economic forces shaping the U.S. outlook—and why inflation might already be in retreat, even as the Federal Reserve stays cautious. He argues that we’re in the midst of a disinflationary trend driven by excessive debt, declining velocity of money, and the structural weakening of global demand. The headlines may still focus on price spikes and strong consumer spending, but underneath, the economy is quietly slowing.

According to Hunt, most of the inflation we’ve seen since 2021 came from temporary fiscal shocks—stimulus, supply chain breakdowns, and war-related disruptions. Those drivers are fading. Meanwhile, productivity is rising, the money supply is shrinking, and real wages are under pressure. All of that, in his view, makes the Fed’s inflation fight largely complete—even if they haven’t admitted it yet. He thinks further tightening would be a policy mistake with long-lasting damage.

Looking forward, Hunt makes the case for lower yields and weakening growth. He believes the long bond will ultimately reward patient investors as disinflation becomes more obvious. Unlike many commentators calling for crisis or hyperinflation, Hunt sees a gentler—but still very real—reversion to low growth and falling price pressures, especially as debt service costs crowd out productive investment.