In this edition of The Macro Show, Hedgeye CEO Keith McCullough and Director of Research Daryl Jones discuss Hedgeye’s outlook for inflation, and how our view on shelter drives our CPI forecast far above the rest of the Street.
"A third of that CPI headline number is rent. Where do you think Shelter is going next? It just bottomed - it’s going to mean-revert. The probability of this shooting through its previous cycle-high is very high," explains McCullough as he runs through our differentiated view on headline CPI and inflation.
“Both [Hedgeye Financials & Macro analyst Josh] Steiner and [Hedgeye REIT analyst Rob] Simone talked about rents on The Call; our view there is much different than the Street. We think rents are going to be much higher for longer, underpinning higher CPI prints,” remarks Jones, highlighting the underlying inflationary factors driving CPI.