Stop The Presses: Albert Edwards Agrees With The Fed

"Albert Edwards agrees with the Fed" isn't something you hear very often, but it's applicable when it comes to inflation. Or at least in the near-term. In a Thursday note called "Don't panic - just yet," Edwards argued that the rather dramatic upturn in US inflation will likely prove transitory and that "investor worries will evaporate." True to form, Edwards added an ominous caveat: "This respite will prove to be brief." Core inflation in the US surged the most since 1992 in May, data out Th
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7 thoughts on “Stop The Presses: Albert Edwards Agrees With The Fed

  1. Over the long haul? It’ll be down to politics.

    My fear is that we seem to be oscillating between a Cyberpunk future and a neo-fascistic one. Neither is really healthy for me.

  2. See also David Rosenberg – similar view as Edwards.

    Also note how retail sales slows promotly whenever stimmies aren’t being paid. Imagine when pandemic UE benefits end in early September. Finally money velocity remains very low.

  3. Yeah I’m not sure I agree with the rosy outlook on goods anyway. The chip shortage is creating a backlog across multiple industries that have become reliant on tech to improve their goods. Ford had (not sure it’s a has) parking lots full of F-150’s they couldn’t finish because they were out of chips. Acer came out last week and said they would only be able to meet 50% of demand for their laptops this year because of the shortage. I’m not sure how these mfrs are going to tool up factories quickly enough to fill that huge of a backlog.

    The lumber association is saying 1.5 years to catch up to demand, that’s not soon and that is probably too late to stave off economic impacts from their lack of supply. As in by the time they finally get their mills tooled up to meet the current demand we’ll be in a recession.

  4. “The connection between slack in the economy or the level of unemployment and inflation was very strong if you go back 50 years and it’s gotten weaker and weaker and weaker to the point where it’s a faint heartbeat”

    -Jerome Powell to AOC explaining whether the Phillips curve is still relevant.

    1. It still may be. The most dramatic price increases currently have nothing to do with US labor supply, but rather with materials, logistics, commodity financialization, asset price inflation, demand recovering faster than companies expected, etc. The inflationary impact of the $10/hr job dishwashing job now paying $13/hr is not zero, but it is a tiny factor.

  5. So far the consequences of stimulus are less than the negatives of inaction. We would be looking at another Great Depression, part 2 if we hadn’t done anything.

    Didn’t we want a little inflation just a couple of years ago?

  6. In other words Edwards just reiterated what he has been saying for some time (like since march?) if I correctly remember from my readings here.

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