Inflation Is Back — But This Time, Will It Stay?

It feels like déjà vu all over again. Inflation—the economic buzzword we all hoped had peaked and faded—is back in the headlines and, more importantly, back in our wallets. The question now is whether this latest wave is transitional or here to stay.

Many economists continue to insist that inflation will cool as supply chains stabilize and policy measures take effect. But from where I stand—and likely where many households stand—it certainly doesn’t feel temporary. The Real-Life Squeeze I’ve started noticing inflation creeping into nearly every corner of my monthly budget. It’s not just one area—it’s everything: - Subscription services I’ve used for years have quietly increased their prices. Some of them are discretionary, like my gym membership, but others—like internet service—are now non-negotiable essentials. - Groceries are another story entirely. Each shopping trip feels heavier on the wallet, even as the packaging gets lighter. The term “shrinkflation” isn’t just a buzzword—it’s a lived experience for anyone paying attention to the portions and prices in their cart. While wages have moved up somewhat, they’re not keeping pace with this broad-based price pressure. The consumer—the real engine of the economy—is feeling the weight of this imbalance. Markets Seem Unfazed What’s surprising to me is how financial markets seem to be brushing off these concerns. The AI trade continues to dominate headlines and investor sentiment, pushing valuations in tech and automation sectors to lofty heights. Optimism is high that innovation will carry the economy forward, and for the time being, that story is winning. But history reminds us that when consumers struggle, the broader economy eventually feels it. Spending slows, margins tighten, and the market narrative shifts. If inflation continues to bite, it’s only a matter of time before this imbalance forces a reset or inflection point. Transitional or Structural? So, is inflation truly transitional this time? I’m not so sure. We’re seeing structural changes in labor, manufacturing, and energy costs that suggest inflation might linger longer than policymakers hope. Add to that the geopolitical dynamics around global trade, and the picture becomes even more complicated. Even if inflation moderates, it may settle at a new normal—one that’s higher than the near-zero rates we became accustomed to over the past decade. For now, I’m keeping a close eye on spending patterns and adjusting where I can. The key for me is flexibility—both in personal finances and in investments. It’s about adapting rather than reacting. If inflation remains sticky, consumers will continue to bear the brunt—and sooner or later, markets will have to acknowledge that reality. The next few quarters will tell us whether this is just another temporary wave or the start of a new inflation era. My gut says it’s the latter, and that means it’s time to plan accordingly.