Zandi, a trusted adviser to policymakers at the congressional level, suggested inflation already hit its peak back in the fall of 2021 when the coronavirus pandemic was disrupting labor markets and global supply chains.
"Things are still scrambled, it’s taking a while to get things back in order, but they’re moving in the right direction," he said. "I do think that it’s a pandemic phase and that’s the most likely scenario going forward."
"We’ll start to see supply chains, labor markets, product markets start to iron things out and inflation moderate."
Host Maria Bartiromo pushed back on Zandi, pointing to the high PPI projection, consumer inflation concerns and the looming threat of recession. The economist responded that even though he does not expect a recession in 2023, the possibility can never be ruled out.
The Labor Department said Tuesday that its producer price index, which measures inflation at the wholesale level before it reaches consumers, surged 9.7% in January from the year-ago period, slightly below the 12-year high of 9.8% notched in November and December. But in an unexpected turn, prices rose 1% in January on a monthly basis – well above the revised gain of 0.4% in December.
The surge in wholesale prices comes on the heels of a separate Labor Department report released last week that showed consumer prices climbed 7.5% in January from the previous year, the biggest increase since February 1982, when inflation hit 7.6%. Consumers are paying more for everyday necessities, including groceries, gasoline and cars.
According to Zandi, inflation should be tapering off within the next six months based on rate of increase year-over-year.
Bartiromo questioned what’s supporting Zandi’s positivity after previously claiming inflation was transitory. Zandi doubled down on his statement that inflation is, in fact, temporary which Bartiromo rejected.
"But it hasn’t been transitory," she said. "Consumer inflation is at a 40-year high right now. You don’t think now’s the peak?"
"Prices are rising, there’s no doubt about it," he countered. "I’m just saying… the increase in price you paid this month, Maria, is less than the rate you paid back six months ago. To me, that means inflation is moving in the right direction."
Zandi explained that there’s still a "long way to go" in order to correct inflationary damage, but his forecast is still optimistic.
"My sense is the underlying cause of inflation is the pandemic and as that goes away inflation should moderate," he said. "When you go buy some meat, or you go to fill your gas tank six months from now, you’ll be feeling better about things."
FOX Business' Megan Henney contributed to this report.