• Michael Wilkerson, founder of Stormwall Advisors, believes that US inflation could rise to 12% by the end of 2023.
• Wilkerson’s views stand in contrast with other analysts and strategists who anticipate that inflation will decrease this year.
• He attributes his expectations to the increase in money supply due to the COVID-19 pandemic and the Federal Reserve running out of “firepower”.
Michael Wilkerson’s View on U.S. Inflation
Market Strategist Michael Wilkerson believes that US inflation could rise to 12% by year-end despite predictions of a decrease from other analysts and strategists. His views stand contrary to these predictions as he attributes his expectations to the increase in money supply due to the COVID-19 pandemic and the Federal Reserve running out of “firepower”.
Cool Down Over Past Seven Months
The U.S.’s inflation rate has cooled down over past seven months since its peak in June 2022 according to reports, but Wilkerson insists on another surge in U.S. inflation before year-end. In an interview between Kitco News anchor Michelle Makori and Michael Wilkerson, he expressed his expectation for this spike up, acknowledging that his view is in minority yet emphasizing that „inflation doesn’t move in a linear path; you do see some cycling.“
Increased Money Supply Due To Covid-19 Pandemic
Wilkerson explained how M2 money supply has grown since 2008 and further ballooned during the Covid-19 pandemic which inevitably results in an accompanying increase in prices as evidenced by historical patterns. He believes that from policymakers‘ perspective, inflation is a preferable option since it is the „lesser of two evils“. The Fed is going to run out of firepower,“ he told Makori adding: „Ultimately, this becomes a trade-off between tamping down on inflation, slaying the inflationary dragon, and allowing recession and unemployment to rise.“
Economists Anticipate Decrease In Inflation This Year
In contrast with Wilkerson’s views economists like Mohamed El Erian expect US inflation will decrease this year given there hasn’t been any significant traction from fiscal policy or economic stimulus packages recently passed or proposed by Congress or President Biden’s Administration which would result into faster economic growth leading up to higher prices due increased demand for goods and services across sectors within national economy .
The debate between whether or not US inflations will go up or down continues between market strategists , economists , analysts with no clear consensus conclusion coming forth at present . Nonetheless it remains interesting topic worth keeping an eye upon as we head deeper into 2021 .