WEALTHTRACK David Rosenberg Explains Why Inflation & Interest Rates Will Go Lower
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Feb 6, 2025 
David Rosenberg, president and chief economist at Rosenberg Research, shares his contrarian views on inflation and interest rates. He predicts that inflation will decrease, prompting the Fed to cut rates more than anticipated. The discussion debunks common myths about inflation and highlights the impact of AI on productivity. Rosenberg also emphasizes the importance of a diversified investment strategy, especially in the current market, recommending long-term portfolios and Canadian stocks for stability.
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Inflation Is Rate of Change
- Inflation is a rate of change in prices, not the price level itself.
- While prices may remain high, the rate of inflation can decrease significantly.
AI's Impact on Inflation
- AI is expected to drive significant productivity growth, which historically correlates negatively with inflation.
- This productivity boost could offset wage increases and mitigate inflationary pressures.
Tariffs and Inflation
- Tariffs create a one-time price shock, leading to temporary, not sustainable, inflation.
- Recurring inflation occurs only if these shocks are repeated annually, like OPEC's oil price hikes in the 1970s.