Michigan has certainly looked very impressive this year and a lot is being made of their two straight wins over OSU.
There are articles about how PSU is now "chasing" Michigan rather than chasing OSU.
PSU is 2-2 vs Michigan over the last four years, including a very close loss (that probably should have been a win) in 2021. PSU has also played very close games against OSU over the past 6 years. My assessment is that PSU is not very far behind either program.
However, I would make three points about Michigan's recent success as they relate to PSU.
1) In the four years prior to Michigan's first playoff appearance, their records were: 8-5, 10-3, 9-4, 2-4 (all under Harbaugh). That's mediocre (ish) and not dissimilar from where PSU is.
2) While Michigan was (mostly) impressive this year, their 2021 results included a loss to MSU and squeaking by (1 score games) against Rutgers, Nebraska and PSU.
There is zero reason PSU can't also break through. Recruiting is similar, coaching is similar, facilities are similar, NIL is similar. Just a matter of time.