What If Disinflation Turns Out To Be Transitory?

09/18/23 03:11PM EDT

The guest commentary below was written by Jesse Felder of The Felder Report. This piece does not necessarily reflect the opinion of Hedgeye.

What If Disinflation Turns Out To Be Transitory? - 01.20.2021 inflation cartoon

Inflation has come down a great deal from its peak, but what if that disinflation turns out to be transitory?

https://twitter.com/jessefelder/status/1702005585955463657

Certainly, there are important dynamics in commodities markets today that threaten to make the Fed’s job much harder.

https://twitter.com/jessefelder/status/1702317062016893036

In addition, a rising dependency ratio represents a structural tailwind to the inflationary impulse.

https://twitter.com/jessefelder/status/1701258695072702838

Meanwhile, the inflation already incurred by the economy may soon threaten the integrity of the “soft landing” narrative.

https://twitter.com/jessefelder/status/1702315221753475516

Of course, the message from the bond market has not wavered. And, unlike economists, it has a perfect track record.

https://twitter.com/jessefelder/status/1702320284974600667

Perhaps it’s time for the “stagflation” narrative to make a comeback.

EDITOR'S NOTE

This is a Hedgeye Guest Contributor piece written by Jesse Felder and reposted from The Felder Report blog. Felder has been managing money for over 20 years. He began his professional career at Bear, Stearns & Co. and later co-founded a multi-billion-dollar hedge fund firm headquartered in Santa Monica, California. Today he lives in Bend, Oregon and publishes The Felder Report. This piece does not necessarily reflect the opinion of Hedgeye.

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