HAIL - Special Year-End Comment: A Look Back A Look Ahead

• After the dramatic disruptions of 2020, and even with the curve balls we keep getting thrown from the virus, the economy has managed to stay on reasonably firm footing as we head into the new year.
• Compared to the experience of the long 1970s, the inflation we are seeing today really is likely to be transitory. Higher prices today are a direct result of several things all happening at the same time, all related to the pandemic.
• Many economists today are citing Fed policy error as their top concern for 2022. The most likely policy error would be misreading the economic growth climate: assuming that low unemployment with inflation still above two percent means getting on with the business of rate hikes, only to find that demand is falling faster than the headline numbers might be showing.

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