My prediction on CPI in 2022.
Continuing inflation increases in the .5 to .7% range a month for Q1 and Q2. Then Q3 will be a leveling off quarter as we approach the 2022 mid-terms. Peoples memory tends to be short.
The Fed has indicated that they were going to raise interest rates at the end of Q2 however, do not be surprised if they raise rates earlier - Maybe, at the end of Q1; they might raise rates slightly earlier, to see what happens and adjust accordingly in July.
Keep in mind that raising interest rates is a double edge sword. Raise the rates and inflation slows but interest paid out on Treasury bills increases.
Remember my earlier prediction of a 6 to 9-percentage increase in 2021? Okay, even a blind squirrel finds a nut once in awhile. Much better prediction than my financial advisor who predicted a 3.5 to 4.5- percent CPI.
Now keep in mind, if Russia invades the Ukraine that will have a minimal affect on inflation however, PM's will climb and the stock market will have a nice correction of 20 to 25-percent. If China invades Taiwan or the Himalayan region, then all bets are off on inflation. I won't even speculate how that will affect the supply chain which means higher prices.
If Russia invades the Ukraine and China strikes invades whom ever, PM's will go crazy, the market will not just correct, and inflation will probably go into double digits. If you think shelves are empty now, we will look back on December 2021 as the "good old days".
Anyway, just my two cents. After all,
"Men, be ready to make changes on the battlefield?we all know that no plan survives contact with the enemy." -
Field Marshal, Helmuth von Moltke
