Ah someone who has only read the headlines and not actually looked at the actual statements done on the June 16 meeting.

In its updated forecasts, the Fed acknowledged it had missed on inflation expectations, upgrading its preferred core inflation forecast for 2021 from 2.2% all the way up to 3.0%. That’s a large jump, but that’s based on what’s behind us. The forecast for the same index in 2022 and 2023 scarcely moved, at 2.1% for both years.

Fed out of Atlanta has a measure called sticky core inflation. It’s less transitory. Sitting at 2.6 percent. Not low but certainly not a worry……yet.

Lumber….down. Copper….down. Gold…down…10 year Treasury yields….down. All signs inflation will not be an issue. Now I will say it will be till 2022 mid year before we see the transitory inflation wear off on certain items.

Inflation is a tricky beast but until we see sustained wage growth, the largest influencer in sustained CPI growth the economic models indicate inflation is not a problem. There are no absolutes in economic forecasting but I bet the farm on inflation not being an issue, I’m worried about a stalled recovery and deflation showing up. Then we are all fooked.

Oh the bank CEOs?? It was three of them that recently spoke about it. The clearly admitted during the meeting their staff economists disagreed that them about inflation. So even in a powerful organization like Wells Fargo the experts are disagreeing with the CEO.