Hoisington's Lacy Hunt is very sharp but his inflation outlook diverged from ours in early/mid 2021 and we haven't linked. Here he is in June 2021 with the CPI having just printed at 5.4% saying deflation was coming. Deflation is coming, someday, but when you are that early, you are not early, you are wrong.
On the other hand, Hoisington does a nice quarterly econ roundup, chock full of facts and figures, which they make publicly available.
From Mishtalk, September 23:
Lacy Hunt and Danielle DiMartino Booth on Liquidity and Problems the Fed Faces
Hedgeye TV presents an excellent video discussion of issues the Fed faces on bringing down inflation.Danielle DiMartino Booth 1-on-1 with Lacy Hunt
Please consider Danielle DiMartino Booth 1-on-1 with Lacy Hunt
The pair discuss liquidity, velocity, the Fed PUT, QT, who inflation hurts most, the stock market sectors most affected, who inflation hurts most and when recession hits.
Booth noted that housing prices are just starting to come down so headline CPI may be high into 2023.
"This is a problem the Fed created for itself," responded Lacy. And due to the lag in rent adjustments, "the Fed is being hit by its tail."
But Lacy went on to say "Inflation rate has clearly peaked and is heading downward." Many will disagree with that but I believe it's spot on.
Danielle commented that "It was intriguing to me that the assumption is that GDP would be 0.2 percent for all of 2022. Do you think they were broadcasting a message by taking the GDP down so far to where it's almost a rounding error and yet they remain as resolute as they are. Am, I reading too much into this?"....
....MUCH MORE
Although Dr. Hunt has clearly moderated his tone, anyone who even mentions "peak" inflation gets a demerit. Peak is just a datapoint, it just doesn't matter. The damage has been and continues to be done whether CPI inflation is reported at 8.3% or 6.3% or 4.3%.
Wages for the vast majority of people are not keeping up and every month people fall out of the middle class and every month people drop into a subsistence life, where, after shelter energy and food, there is no discretionary income, and then the food choices decrease and the energy poverty arrives and the landlord doesn't want any more reasons/justifications/excuses.
So I don't much care for the heralds of "Peak."
