@colton18 The OP provided some lagging metrics but conveniently excluded all of the newly released leading ones. If you're actually curious, I shared the other side of the coin here.
@seeburger The leading ones are that natty gas is down 70% over the year and gasoline flat this month, down 20% over the year. Oh and most commodities are also down or flat.
@colton18 No inflation is coming back problem is large amount of money pumped into market via fiscal policy and Fed due to Covid .
You are not going to burn that way that easily and after initial shock of higher borrowjng rates have subsided consumers are starting to spend again (just try to book any cruise or vactation for summer and see sky high prices) .
Till you get hard landing aka bad recession this inflation will not go away.
@showmehow M2 is crashing hard. This chart shows the YOY % change, down 2%, which seems small until you view it in perspective over 40 years. The increase during 2020 is unprecedented, the recent decline is unprecedented (but predictable), but now it's showing a sustained negative value for first time ever.
@sonnessa A decline in M2 basically guarantees an eventual crisis, right? We have declining money which would be okay if people were deleveraging, but if you look at debt levels they continue to ratchet upwards. Something will have to give eventually, either a spending slowdown to deleverage or a credit crisis.
@lexismom Supply/demand. I think it will depend a lot on the demand for money. I don't think there's any great metric for this, but M2/GDP tends to give one an idea. It's also declining rapidly, as one might think with rates this high, (borrowing slowing), but not as fast as M2 itself. I think the relationship suggests that the likely outcomes are not particularly extreme either way, and that inflation is likely to be flat to down in the next year or two, but I'm just another armchair nerd trying to figure it all out. The big surprise is just how robust GDP & employment have been and are forecasted to be in 2023. I have a hard time seeing a significant recession this year.
@felipe1 Why would you work in service when any other job can potentially pay the same but be done from home? Service is just permanently more expensive due to lesser attractive job so labour market will be tight until wages rise more than at home desk jobs.
@retiefff People refuse to acknowledge that rate hikes are working on a lag of about 7-12 months. This means that only about 75-100 bps hike has filtered thru the economy. Give it sometime to see the full effects of 5% hike.
@resjudicata In Southern California you need to make at least $120,000 a year to afford a mortgage for a 30 year old condo in a bad neighborhood. So I would say the housing market is extremely overvalued.
@letstrythisagain Housing market has a lot of issues. US should be doing what canada does and limiting foreign owners. Should also kill Airbnb and allow evictions. More investment is good if we get more stock otherwise we're just seeing locals competing against the wealth of the world.
@resjudicata It’s rampant speculation and investors pouring into the housing market and limited supply driving up the prices. It has all the signs of a bubble. This simply isn’t long term sustainable.
@resjudicata Lots of bubbles are going to pop. Anything that was made possible by cheap money is toast. Bitcoin, tech startups, real estate, and finance in particular.
