(SPONSORED) — Inflation is hurting everyone’s wallets, but are the numbers showing any signs of a rapid decline back to normal? Tatiana Bailey, Director of Data-Driven Economic Strategies (DDES) explains why recent data may not be so promising.

Bailey explains that for decades, no one, not even economists paid any attention to the monthly inflation reports because they didn’t change very much. However, Bailey has been going back and forth about whether inflation is going to come down quickly or take its sweet time.

“This week’s report is pretty telling. First, it is important to know that when we’ve had inflation in the past decades, typically prices go up quickly, but they are surprisingly slow to come back down, but we have also not had a pandemic in about 100 years,” said Bailey.

Bailey has been hoping the distortions caused by the pandemic have been such unusual circumstances that inflation could maybe subside more quickly. However, Bailey explains this month’s report does not show good signs of a quick inflation recovery. Compared to January a year ago, the inflation index or CPI is up 6.4% versus 6.5% at the December reading, an almost insignificant decline said, Bailey.

The month-over-month increases in November and December are not showing much promise either. They were .2% and .1% respectively, while January of this year was half a percentage point. Bailey said that about half of January’s increases were in shelter, the others were food, gasoline, and natural gas. Bailey worries about the household’s ability to continue to absorb these costs.

Bailey explains that because shelter prices have been so distorted the Federal Reserve is now looking at something called the super core inflation, which separates out shelter costs, Bailey explains the Fed is doing this because they think shelter prices are going to come down, but Bailey believes otherwise. Bailey looking at the housing data and talking to real estate agents and construction companies said the market will pick up a bit and should pick up more in the spring.

Bailey said it is very possible the Fed is banking on depreciating house values that never materialize, given the national housing shortage. She says that if the Fed wants to get inflation back to a normal 3%, they are going to have to address the higher shelter costs from higher interest rates that will further squeeze the housing market and make homes affordable only to the highest income groups.