Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough. 

Disinflation is as disinflation does in our proprietary GIP (Growth, Inflation, Policy) Nowcast:

  1. We have the headline Inflation Cycle peaking in Q1 of 2022 at 7.73%
  2. We have an initial Disinflation of Peak Cycle Inflation to 7.24% in Q2 of 2022

No, I am not going to write you a white paper on “why.” I am just going to do what I always do with my family’s hard earned capital, and I am going to execute on those ROC (rate of change) slowing nowcasts with my #VASP (Volatility Adjusted Signaling Process) leading me.

The simplest reason on the beloved “why” is math:

A) As you can see in the Chart of The Day, the 1yr base effect goes from 1.90% to 4.85% from Q1 to Q2
B) In case you didn’t know that that’s the steepest quarterly ascent in Inflation’s base effect, now you know
C) The higher inflation readings go in FEB and MAR, the faster inflation slows at this time next year

CHART OF THE DAY: Disinflation Is As Disinflation Does - 3 15 2022 7 18 06 AM