SPY - Inflation Scenarios Without A War: U.S. Markets Face Trouble

2024-04-11 08:25:33 ET

Summary

• We discuss different inflation scenarios for the USA, assuming no major disruptions to global oil supplies.
• Four non-oil-shock scenarios for US core inflation between now and October 2024 are examined.
• The 6-month and 12-month annualized rates of CPI growth under these scenarios are analyzed, with potential implications for the Fed's interest rate decisions.
• We believe that under any of the four inflation scenarios analyzed, US financial markets will face considerable troubles.

In this article, I am going to discuss various inflation scenarios for the USA, in which I assume that there will not be any wars or other events that could disrupt global oil supplies. I will follow up this article with a discussion of likely scenarios for U.S. inflation and GDP if there is a war in the Middle East, or other event, that significantly disrupts global oil supplies....

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