Joe Gagnon is correct here: Listen to him: Joseph Gagnon: There Is No Inflation Puzzle: "Inflation is behaving exactly as the Phillips curve would predict...

...The decline in the US unemployment rate is too recent and too small to have caused any significant rise in inflation to date. Inflation is likely to pick up a bit next year, which supports the Fed’s tightening path, albeit with a considerable degree of uncertainty. The true puzzle from the point of view of a simple Phillips curve model is the lack of much downward movement in inflation in 2010–14, when the economy was far below potential employment.[2] But this puzzle is easily explained by the fact that workers and firms strongly resist outright declines in wages and prices...


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