IDK. The economy grew 5.7% in 2021, and CPI went up 7%. That was with pedal-to-the-metal QE, nearly full employment, near-ZIRP, and advance payment of child tax credits, which will be missing from people's tax refunds in 2022 and serve as a sort of tax compared to previous years. With all that going on, inflation was growth+1.3%.
I'm not following this comparison. Inflation had nothing to do with growth - it was not proportional or a certain amount added to growth, as your calculation shows.
As the U.S. emerged from lockdowns, and stores reopened, demand surged. The supply chains not only weren't ready, they still faced Covid-19 problems. So demand surged, but supply couldn't keep up: supply side inflation.
The Fed expects supply chain problems to clear up by the first half of this year, so you would need to predict inflation being longer or shorter than the Fed's expectation, and maybe how much it might be afterwards.
I'll concede that the growth/CPI correlation is weak. CPI is affected by numerous other variables, such as forex rates, import prices, interest rates, investment flows, crises, etc. Yet, it is generally taught in econ 101 that recessions are disinflationary and periods of breakneck growth are inflationary. This makes sense when one thinks of the modern definition of inflation as an increase in monetary velocity. It is a fuzzy relationship, so the distance between GDP growth and CPI changes over time.
Inflation has typically been close to GDP growth. From 2016 to 2019, CPI was roughly GDP growth minus somewhere between 0.23% and 0.60%. Over the past 10 years, CPI has been within 0.93% of GDP growth 7 times out of 10, with big events explaining the 3 outliers.
Year GDP Growth CPI Change
2008 -2.01% 3.8% (-5.79% spread!)
2009 -2.54% -0.4% (-1.14% spread, recession, modest stimulus)
2010 2.56% 1.6% (0.94% spread, recovery year)
2011 1.55% 3.2% (US loses AAA credit rating, USD loses value)
2012 2.25% 2.1% (0.15% spread)
2013 1.84% 1.5% (0.34% spread)
2014 2.53% 1.6% 0.93% spread)
2015 3.08% 0.1% (3.07% spread, Eurozone crisis, Greek default, USD gains value)
2016 1.71% 1.3% (0.41% spread)
2017 2.33% 2.1% (0.23% spread)
2018 3.00% 2.4% (0.6% spread)
2019 2.16% 1.8% (0.36% spread)
2020 -3.49% 1.2% (2.29% spread, recession, massive stimulus)
2021 5.7% 7% (-1.3% spread, boom year)
The point is that if people are expecting inflation to be 5-7% and growth to be 3.0-4.5%, that kind of +2 to +3% spread between inflation and growth would be an odd year - something that doesn't happen except in years of economic crisis like 2008-09, 2015, or 2020. In recent history, CPI has only been higher than growth when a crisis was occurring. Is it more likely we'll see yet another economic collapse somewhere in 2022-23 or is it more likely the GDPgrowth-CPI spread reverts to its sub-1% levels for a few years like we've seen after the past 3 crises?
https://fred.stlouisfed.org/series/DTWEXBGS I'm suggesting the bond market is looking at the big picture and the financial media is simply extrapolating the trends of the last two years, as they have always done.