FATT - Taking Inventory Of Real Economy Inflation Potential

• The chip problem is holding back what is already a monstrously robust (if artificial) sales environment in the auto sector.
• While the entire retail sector grapples with supply and supply chain issues, outside the automotive segment the rest of it has been far more successful mitigating bottlenecks. In fact, by both anecdote and data, retail inventory ex autos is at record levels.
• The key question now isn’t even about whether this sugar high wears off, but by how much and how long does it take? The reduction in sales should continue, unevenly as always, over the coming months. What everyone wants to know is how far down does it get before renormalizing.

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