Markets seem to be missing the risks on US inflation

Financial Times/Rebecca Patterson

Repost from 9-9-2021

chalboard showing inflation pattern as chart with symbols for various currencies“Yet financial markets continue pricing in both that the inflation will prove transitory and that policymakers will barely need to budge in response. We see this potential combination of outcomes as unlikely.”

USAGOLD note: Interesting insights from Bridgewater Associates’ Rebecca Patterson. More and more, analysts are pointing to heavy demand – driven by consumers with loads of cash – not the lack of supply as pushing up the inflation rate. “[A]ggressive fiscal stimulus (including another $2-3tn in spending likely to be passed before year-end),” says Patterson, “accommodated by money printing, is fuelling demand without commensurate supply.” We agree with that succinct description of the inflationary forces now at work in the economy. The full analysis is worth the time spent at the link ……

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