Economist Milton Friedman and I have many things in common,. We both believe that inflation is driven by the excess supply of money. More dollars chasing the same amount of units. After that, our similarities sort of fall off a cliff. Like him winning the Nobel Prize and, well, me not winning that….yet. I digress.
Energy prices up a lot, food prices up a lot, cars/microchip prices up a lot, shelter prices up a lot. The Fed cannot control supply but can support or destroy demand as it sees fit. The next six months will be all about how the Fed destroys demand in a thoughtful, prudent, reasonable fashion. Demand lower, inflation lower, yields lower = “soft landing”. The market has the Fed playing catch-up but thoughtful demand destruction is clearly the #1 priority of the Fed from now til Sept/Oct.
Chief Investment Officer
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