Inflation Rate Predictions

[5:33] we're going to have a supply shock the likes of which we haven't seen since the 1970s.

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[8:55] The inflation story is still going to remain with us uh even when this war ends.

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[35:09] No, I think inflation's heading back to 2% or even lower.

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[13:35] Plus, we'll probably see that with the March CPI coming out that'll be I think substantially higher.

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[13:25] I think we're heading towards very strong deflationary environment which however could be countermanded by political and fiscal actions.

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[1:58] I do think that inflation is is likely to stay higher for longer.

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[9:48] one of the takeaways in my big picture macro analysis is that we're going to see the next leg up in inflation

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[9:31] you've got uh increasing energy costs that's going to cause uh increasing inflation

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[17:19] I fully expect this number to be close to to zero by this year, if not next year.

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[11:11] those uh numbers will go up and we're looking probably at a 5 to 8% inflation problem for a period of time as that goes through the supply chain.

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[0:00] So inflation is going to continue to accelerate. Inflation is going to go into the double digits and who knows it may even go into the triple digits.

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[19:52] I thought we had an inflation problem just around the corner and the inflation genie would never be put back in the bottle. That's that's what I thought.

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[8:37] I I think it's going to happen. I I think it sort of does not this is why I'm very sort of sympathetic with the idea that we're going to see more inflation because that's going to drive inflation and I do think they want inflation

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[2:18] I mean, I if people think inflation's coming down over the next couple of three years, I think they're going to be very disappointed.

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[25:54] I don't think the Fed is going to be able to put that genie back in the bottle. meaning what what's that 2% or less? I don't think it's going to 2% or less.

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[32:41] I think it's going up. I think I think it's going it's going it's going up. It's going to it's going to drift up.

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[3:47] The first part of the year we expect to be a Goldilocks environment where inflation is still tamed from those factors we talked about last time. Those three factors are still holding inflation down.

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[5:52] I think inflation is sticky and probably heading up.

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[6:18] potential chair WH if he's confirmed um will not necessarily be battling inflation, but battling its its evil stepsister, disinflation.

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[32:43] I don't think this loosening will allow the Fed to get back the genie of inflation back in the bottle and get down to the target of 2%. I think that's the real problem and that's going to be a big problem for Trump

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[13:16] And in the first half of the year, we have inflation dropping towards 2.25%. the street's still at like three, you know, for the second quarter. That's way too high.

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[20:46] I think in the next three or four years, it's reasonable that we're going to see even official numbers show inflation's running at 7 8 10% maybe more.

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[17:24] 2026 I expect the inflation rate to be anywhere 3 higher than 3%.

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[10:10] I still believe that we're not going we may go to 2% from a rate of change standpoint for a period of time, but I don't think we sustainably stay there... I expect inflation volatility and to my point as you mentioned that I made last year, I don't expect us to go to 2% and magically stay there. We may go to 2% temporarily but I expect a real acceleration thereafter. Bottom line is I think inflation volatility is here to stay

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[22:54] we're talking at 4% inflation

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[25:06] In other words, we could easily be looking at sliding right below the Fed's 2% target going into the new year with this gauge that I follow.

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[4:08] I think it's safe to assume that next year at this time inflation will be quite a bit lower than where it is now.

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[27:09] I tend to think that it's going to happen in the next six months. Maybe a year at the most.

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[34:14] I personally believe that in this next cycle, we'll break double digits. The last cycle we went up to nine.

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[10:50] you know the Federal Reserve may try to lower rates more but they're going to be struggling with sticky to higher inflation. And interestingly also there's a 67month cycle in the unemployment rate and we're also into a rising unemployment trend according to that cycle uh as well that still has some room to run. So yes, we are seeing higher pressures on unemployment and we've been we anticipated those a while ago. So there is pressure for the Fed to lower rates based on higher unemployment, but it's happening in the face of persistent and sticky and probably even rising inflation over the next 12 to 18 months.

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[10:09] I think in 12 15 months from now which I think inflation will be back up again

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[16:53] I think in generally inflation is going to be sustainable though. between three and four.

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[5:29] I think happen again on Friday with the Fed's favorite measure the PCE core inflation rate which is going to show an increase

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[12:09] you're going to have higher inflation in the coming months of this uh half of the year and perhaps at the beginning of 2026

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[24:18] I think there's definitely a chance that you'll see an uptick in the next month or two as well as some of these prices again come through with a slight lag

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[3:59] We are still in a downward trajectory for inflation and the reason for that is that inflation is always an everywhere a monetary phenomenon. So you have to look at what was going on a couple years ago with the money supply to get some idea of what's going to be happening with inflation today or tomorrow. And since the money supply two two and a half years ago was actually contracting, it would indicate that we'd stay on this downward trajectory.

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[28:31] So in the next year we shouldn't be concerned about doubledigit inflation or high single not double digit inflation maybe high singledigit inflation coming back. You know people have painful memories of 2020 and 2021. So

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[21:54] I think we have a circumstance that resembles very much the decade of the 1970s where according to the Congressional Budget Office, the US dollar lost 75% of its purchasing power. Stated differently, we had several years where the official inflation rate in the United States was in double digits, compounded.

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[6:26] I would expect inflation to continue to creep higher, not just because of Trump's tariffs. There's other factors here. We talked about the deportations having an impact as well. But also, I would just point out is that one of the biggest drivers about a year ago of inflation was the stock market. And the stock market was at all-time highs. We had the big correction in March into April. We're now back at all-time highs. So, the wealth effect, people are feeling that again. They're feeling well. they look at their 401ks up 25% since April. That's a huge move that makes people want to go out and spend u on goods for instance new TVs etc. And so I think that that can also play a role here. So I think a combination of all those things that I mentioned you will see inflation continue to hold up. Again I don't expect a massive spike unless new high tariffs of 30% go into play. But is it going to stay stubbornly around 3% inflation? I actually do think so.

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[25:10] this is probably, you know, a later second half story before we can really uh make a good case or or or a good judgment about whether or not higher tariffs is actually flowing through to domestic prices. That being said, the idea that there's going to, you know, the idea there's going to be a sort of a more significant, you know, wage spiral or inflationary spiral here, we're it's probably not going to happen. And so, you know, it's almost certainly not going to happen. We're talking about 50 or 100 basis points on core PCE at the most in terms of the flow through of the tariffs

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[1:01] I actually think they are right and I actually do think inflation is coming. Uh and I'm talking about over the next few months because of tariffs.

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[28:03] it won't be runaway it won't be fair but it could be five 6% again in the next two or three years

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[10:25] I do think that inflation from this is coming. But I understand the technical reason why Powell dismisses it. [...] So, I do think we're going to see this higher inflation or this bout of inflation near-term. I think that's coming

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[11:20] I think eventually you you will have higher inflation. Maybe not here in the next two or three months just because of sort of the base effects you're looking at, but when you get into, you know, adding these tariffs on things that happen, you should you should get more inflation. I I would guess that you would.

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[12:01] we think inflation over the next decade will yield somewhere between three and a half and five.

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[16:44] I think it it might even hit the Fed's target at 2% or maybe even a little below this year

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[24:13] I think between now in mid year that that's when you would get this breakdown in in in the yield probably because the economy the market whatever maybe all of it together but later on I'm talking about in the latter part of this year and then end of next year your Inflation Rate goes back up again

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[24:31] we felt all along it's going to average for the next decade it's probably going to average three and a half or 4% on average that means sometimes you'll have it at five or six

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