Recent CPI/Inflation data suggests the current wave of global inflation is far from “transitory” and may persist for many months – possibly years. Some believe it is primarily a supply-side issue related to the COVID shutdowns. I think it is a combination of factors driving higher inflation right now (capital creation, stimulus, a broad speculative phase that existed after COVID, and supply side issues).
The result is the US Fed may now find itself pushed even further to raise rates aggressively to combat inflation trends. This may push the US/Global markets into a new downward price phase as we near a broad Pennant/Flag formation that apexes near December 15, 2022.
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