“There is no inflation if you do not wish to purchase things going up in price“– Bruce WD Barren, PhD.
Inflationary pressures are gripping the US economy as it comes out of the VirusCasedemic chaos.
The Big Q: The consequence?
The Big A: Weigh on economic growth.
Big increases of inflation expectations can give inflation pickups more staying power. A Key issues no 1 is talking about are increasing worker shortage in caused by the extended unemployment Top up and the auto shortage fueled by low semiconductor supplies. These 2 components are driving the Northside inflation risks.
Goldman Sacks’ economic team led by Mark Hatzius boosted its Consumer Price Index (CPI) forecasts “significantly further.” They sees CPI increasing by 3.6% Y-Y in June, helping to drive FY CPI to a 3.5% gainer.
CPI is forecast to increase 3.2% in Y 2022, per Goldie’s estimates. .
The CPI spiked up 4.2% in April, that was ahead of analyst estimates for a 3.6% increase.
We here at HeffX-LTN do not think that the Fed is correct in thinking near-term inflationary pressures are transitory. The Fed’s record on these things is most ofen off.
We are concerned, many out spoken Street analysts are not. Inflation is an Northside risk.
Bruce WD Barren thinks the Key questions are: is the economy going to overheat and are we going to move far beyond the potential long-term sustainable level of household unemployment?
And that being the case, then I believe we must be worried about inflation in the short and long terms.
Monday, the benchmark US stock market indexes finished at: DJIA+186.14 at 34393.98, NAS Comp +190.18 at 13661.20, S&P 500 +41.19 at 4197.05, and the Russell 2000 finished +0.5%
Volume: Trade on the NYSE came in at 789-M shares exchanged.
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bullish to Very Bullish in here.
- Russell 2000 +12.8% YTD
- DJIA +12.4% YTD
- S&P 500 +11.7% YTD
- NAS Comp +6.0% YTD
Looking Ahead. New Home Sales for April, the Conference Board’s Consumer Confidence Index for May, the FHFA Housing Price Index for March, and the S&P Case-Shiller Home Price Index for March will be released Tuesday.
Have a healthy day, Keep the Faith!