From Tuomas Malinen’s Forecasting Newsletter.
Issues contributed:
Inflation has become ‘anchored’ in the U.S., and only draconian interest rate hikes and/or recession can bring it down.
Forecasts on European energy situation are very worrying, and we are just entering the “phase II” of the energy crisis.
Globalization is reversing and this is likely to end the era of low inflation and interest rates.
Some analysts and central bankers are arguing that the “peak inflation” is either in or it’s close. Is there any merit in their arguments?
It’s true that inflation has eased, somewhat. In France the harmonized consumer price index, or HCPI, grew at an annualized pace of 7.1% in November. The consumer prices are expected to have risen “only” by 10% (annualized) in Germany in November. In the U.S., inflation has eased a bit more.
So, are we in the “mend”? I think not. In this post I will document, why the peak-inflation -crowd is likely to be mistaken.
Let’s start with a recent summary of Bundesnetzagentur, the German gas authority. On 8 December 2022, the institution stated that:
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