At Cumberland, we continuously have internal strategy discussions. We decided to make one such discussion, on the subject of inflation and US capacity utilization, available in the form of a commentary to clients, consultants, and all readers.
Below you'll find a summation of our discussion, written by Bob Eisenbeis, Cumberland Advisors Chief Monetary Economist.
Inflation, Deflation, and Capacity Utilization
During the pandemic, we have seen both a drop in aggregate demand as well as a shutdown in supply, resulting in a precipitous drop in capacity utilization. To many economists, this convergence means that inflation will