Inflation Expectations + Top Indicator to Watch in 2022


Inflation is a problem, Economy It’s not fate. At least it’s not destined yet.

Inflation is not always out of control. Spirals occur when consumers and businesses expect continued inflation. An extreme example of this is inflation that crippled Germany after World War I.Survivor at that time I have written:

Stay long [shop] The windows were extravagant as the shopping had to be done immediately. Even an additional minute meant a price increase. For example, a rabbit could cost 2 million marks by the time it entered the store, so I had to buy it right away. Millions of marks don’t really mean anything. It just meant that it meant more lag. The money package needed to buy the smallest item has long been too heavy in a trouser pocket. They were pounds heavy. … People had to start adding money to carts with wagons and knapsacks. I used a knapsack.

Consumers spend as soon as inflation expectations take hold. According to recent data, this is not the case at this time. According to consumer research, we don’t rush to buy high-priced items to avoid future price increases.

Source: New York Times..

Consumer inflation expectations

Many consumers will say it’s a good time to buy home appliances when the economy is expanding and prices are stable. They would also say it’s a good time to buy if the unemployment rate is low as it is today. However, prices are expected to rise significantly over the next year.

The low readings in this study show that consumers do not expect inflation to continue at their current pace. They seem to be giving the Fed time to prove that inflation will not rise any further.

Consumer expectations will change if the Fed fails to achieve low inflation within the next few months. If that happens, consumers who act as they expect higher inflation will, in fact, drive higher inflation. This happened in the 1970s, when the United States last experienced sustained inflation.

Consumer sentiment is one of the most important indicators to watch in 2022.

Michael Carrteeth Editor True Options Master, One Trade, Peak speed traderWhenPrecision profit.. He teaches technical and quantitative technical analysis at the New York Institute of Finance. Follow him on Twitter@MichaelCarrGuru.

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