Inflation may reach 3-4% in mid-2022: strategist David Roshe

Inflation on the direction will continue to be seen in dog markets, but there is a growing body of strategists who believe that investors are reducing the outlook for consumer prices.

David Roshe, president of investment firm Independent Strategy, is one of them. He told CNBC on Wednesday that he believed the US inflation rate, which was 2.6% in March a year ago, could rise much higher.

“My own view is that we’ll see inflation of maybe 3 or 4% by the middle of next year, which is completely inconsistent with, say, the yield of US 10-year bonds at 1.6%. This yield easily and when doubled Maybe. CNBC’s “Squawk Box Europe” reported that then you come to Crunch Point, which is about to experience the markets.

“The reason prices will rise, and really some of the things, is that you’re going to end up with, on the other side of the Kovid (epidemic), the huge demand as consumers spend the extra savings they’ve accumulated. ,” he told.

“And you’re going to end up with big government forever … and definitely less efficient and lower efficiency means higher inflation.”

Trader on the floor of the New York Stock Exchange.

Source: NYSE

Roche’s comment came amidst discussion on the direction of inflation. Rising inflation is one of the biggest concerns facing the market right now, as high prices can affect asset prices and corporate margins and limit consumer buying power.

The US Federal Reserve official inflation rate (the latest data shows that the consumer price index rose 0.6% in March from the previous month, and 2.6% from a year earlier) but believes an increase is transient. They say they have tools, such as increasing interest rates, to counter it if it becomes a problem.

David Roshe believed that the Fed would be “behind the curve”, however. He said, “It is a mistake to call it transesterial inflation and try that it is more effective and it causes more long-term inflation problems.” ”

In any case, the rise in inflation is considered inevitable, with the global economy reopening after the coronovirus epidemic. Inflation in the market has been rising to some extent due to higher US Treasury bond yields in the last few months.

Earlier this week, Richard Bernstein, CEO and CIO of Richard Bernstein Advisors, told CNBC that he had denied much about the risks of inflation, which is evidence of how investors have just been deployed.

“Think about what people love. They like long-term equities,” CNBC’s “Trading Nation” said on Monday. “It shows that people are in a way sick to this high inflation.”

“What are the chances of us getting higher inflation than the people? We think it is much more likely to happen,” he said.

– CNBC’s Stephanie Landsman contributed to reporting this story.

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