Markets and people may be wildly overpricing the risk of inflation. This would be the most widely telegraphed economic collapse ever. Bad things happen when people least expect them, not when everyone does. Maybe it's not as bad as the pundits are saying? Let's look at the data.
YoY and MoM growth in the Fed's "favorite inflation indicator", Personal Consumer Expenditures (PCE), slowed in April.
YoY and MoM growth in the Consumer Price Index also slowed in April
The 5=year breakeven inflation rate is falling, a potential leading indicator for PCE.
YoY and MoM growth in M1 and M2 Money Supply has been slowing for several months, and went negative from March to April.
Wage growth may have peaked, but the trend is less clear here.
Retail inventory to sales ratios are picking up, possibly suggesting an easy of supply pressures.
The Global Supply Chain Pressure Index (GSCPI) published by the New York Federal Reserve may have peaked.
Food prices continue to rise, so no help here.
But recently, agricultural input prices have fallen from early 2022 highs.
Knowing is Half the Battle
Conceding there is a problem is an important step forward. There may still be time to get it right.
Any opinions or forecasts contained herein reflect the personal and subjective judgments and assumptions of the author only. There can be no assurance that developments will transpire as forecasted and actual results will be different. The accuracy of data is not guaranteed but represents the author’s best judgment and can be derived from a variety of sources. The information is subject to change at any time without notice.