The Market's Optimism About Inflation

I think for a while now, almost 40 years, we've had a game which is two dimensional where ultimately it's been a cyclical story. What is the economy going to do? And what does that mean about mean for inflation and rates, right? So very simple game. We sit at a very important crossroads as this kind of impending recession comes through in the next three to six months. The market assumes that if we get a cyclical downturn, if we do get the recession that is expected, that we will get inflation coming down to the Fed's 2% target. That I am betting, actually, that that is not going to be the case.

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