March 10, 2022

U.S. inflation keeps going

Look, this isn't specifically a U.S. problem but in the developed world inflation is especially a U.S. problem.  For February it rose again to 7.9%. The Fed has printed a larger amount of money (quantitative easing) than any other developed nation, and that's pretty much also true on a percentage basis as well as dollar amount.  I'm not denying that supply chain issues hurt, and that oil prices due to the Russian invasion of Ukraine will also hurt, but they are much smaller factors than the money supply.  Higher inflation, and supply shortages are unavoidable, even with the looming end of mandates.  I'm not alone in my thinking on this;

U.S. inflation may approach 10% this year, according to DoubleLine Capital’s Jeffrey Gundlach, a historic level that he said underscores the need for the Federal Reserve to aggressively tighten monetary policy even amid fresh uncertainty caused by Russia’s war in Ukraine.
“Their job is to fight inflation,” the billionaire money manager said of the Fed during a web presentation Tuesday. “They’ve done a terrible job of it so far.”
Gundlach, 62, said he expects the central bank to raise interest rates by a quarter of a point at its March meeting, and sees the consumer price index rising to at least 9% before reaching a peak. Inflation may end the year as high as 7.5%, Gundlach said, with surging prices leading to “demand destruction” as food and energy soak up more of household budgets.
The economic outlook is “substantially worse” now than it was in September, he added. Gundlach reiterated his long-term bearish position on the U.S. dollar and cited an “insanely high” budget deficit, while recommending investors sell U.S. equities and buy emerging-market stocks.


No comments:

Post a Comment

Disagreement is always welcome. Please remain civil. Vulgar or disrespectful comments towards anyone will be removed.

Related Posts Plugin for WordPress, Blogger...

Share This