After two years of persistent inflation and uncertainty on different fronts, such as progress in debt restructuring, the disbursement of federal funds for reconstruction, and the future trajectory of interest rates, some observers argue that Puerto Rico's economy is normalizing and that, even without federal funds, the economy is strong enough to sustain robust growth. However, I am skeptical of this statement. The decreasing rate of inflation continued during 2023, with annual growth in general inflation standing at 3.4%, a notable decrease compared to 6.1% recorded in 2022. Parallel to this trend, the labor market showed resistance, with a net creation of 26,200 jobs and keeping the unemployment rate at an all-time low of 6.0%. In addition, the annual growth in the average weekly earnings of all workers (5.8%) exceeded the inflation rate (3.4%) in 2023, marking a change from 2022. These positive changes may favorably impact Puerto Rico's economy in the short term. Although better purchasing power and a possible reduction by the Federal Reserve (i.e., the Fed) in the federal funds rate sometime in the second half of 2024 could support consumer spending and economic growth, a more detailed analysis of several factors raises questions. For example, inflation on the island, particularly for certain foods and services (for example, cereals and bakery products, recreational services, and out-of-home accommodation), still substantially exceeds the average of 1.8% between 1984 and 2019. In any case, a lower inflation rate should not be confused with lower price levels. In addition, the reduction in the federal funds rate will not necessarily alleviate local credit conditions, since loan pricing is more likely to be guided by long-term interest rates, which in turn are influenced by factors outside the Fed's control, including inflation expectations, the federal government deficit and the appetite of foreign central banks for U.S. Treasury bonds. Structural problems such as labor shortages, an aging population, lower productivity and the transition to a net reduction in greenhouse gas emissions by 2030 will keep prices and interest rates high. Nobel Laureate in economics Michael Spence stated in *The Next Phase of Our Inflation Journey* (2024) that “with structural changes that have diminished supply-side capacity to respond to demand-side pressures, higher real interest rates will be necessary to keep demand - and, therefore, inflationary forces - under control.” This would entail a higher cost of capital, which, in our case, will continue to limit private investment. Expensive loans, such as residential mortgages, will also restrict housing affordability in the local market. Finally, geopolitical risks (i.e., the Israel-Hamas war, the Ukraine-Russia war, and the Houthis' attacks on international vessels using the Red Sea route), upward adjustments in local commercial, industrial and residential electricity rates, higher tolls on highways, as well as rising food prices and the volatility of gasoline prices could reverse the trend towards lower inflation observed in the last two years.