No one thinks their bluffing, the market WANTS this, it depresses wages bringing costs down. Corporate profits are responsible for at least half of inflation, and wage growth is a good chunk of the other half. Profits are good reasons to raise prices, but wages isn't, and the market wants to put workers back in their place. They WANT a short recession.

Core CPI ex-shelter was negative the previous two months. The way BLS measures shelter is notoriously laggy. High-frequency metrics of shelter inflation (e.g. Zillow data)[1] is falling off a cliff.

The upshot is that while CPI is probably over-measuring inflation today, and we're basically back to baseline, earlier in the year we were probably running closer to 11-12% inflation with the real housing numbers.

[1]https://www.zillow.com/research/rent-inflation-31602/

Inflation is going down.

The inflation over the past 5 months is 1%, so 2.4% annualized.