Deutsche Bank published a report on Monday saying the United States is facing a “very real specter of consumer-driven inflation.” The bank’s chief economist David Fockerts-Landau and others particularly highlighted the Federal Reserve’s monetary easing policy and its recent tolerance to high inflation.
Deutsche Report: ‘Transcendental Inflation May Feed into ’70s Style Stagflation
The price of commodities in the US has risen according to several recently published studies in the last two months. Currently, commodity-price growth is moving in lockstep as products such as oil are tapped. two year highlumber prices jumped 377% In a year’s time, the electronics are 10% more expensive Across the board, copper has risen record height, soybean and corn prices have skyrocketing, and is acquiring retail beef and pork”sticker shock“
On June 7, Germany’s lending giant Deutsche Bank published a report with dire warnings to the US regarding inflation. The study includes Deutsche’s chief economist, David Fockerts-Landau, the company’s head of economic research, Peter Hooper, and thematic researcher Jim Reid. Analysts believe rising inflation could be a “time bomb” and that US central banks could feel the consequences of delayed action.
“The delay will result in greater disruption to economic and financial activity than would otherwise be the case when the Fed finally takes action,” Fockerts-Landau wrote in the report. “This, in turn, could lead to a significant recession and set off a series of financial crises around the world, especially in emerging markets,” the Deutsche economist said. However, inflation may start a little later than most think, as economies are more liquid than those that were shut down last year.
“Consumers will certainly spend at least some of their savings on the reopening of economies,” Fockerts-Landau elaborated in the report.
Foreign markets troubled by US inflation data
US inflation fears are troubling overseas markets as both Asian and European market US inflation data has been shaken by concerns. Meanwhile, the cryptocurrency economy hasn’t performed as well as most believed it would face inflation, while gold, on the other hand, has seen a decline. significant lift in price From the economic fears gripping the United States.
The Deutsche team says the Fed can be patient for a year and remain tolerant of high inflation rates. However, the authors of the Deutsche report, Fockerts-Landau, Hopper and Reid disagree with the Fed’s current assessment.
“It may take another year till 2023 but inflation will re-emerge. And while it is commendable that this patience is due to the fact that the Fed’s priorities are moving toward social goals, the neglect of inflation puts global economies on time bombs,” according to the report. “The effects can be devastating, especially for the most vulnerable in society.” Furthermore, the Deutsche team says that inflation may be fleeting but eventually it may turn into something even worse.
“The lack of preparation for the return of inflation is worrying. Even though some inflation today is transitory, it may live up to expectations as in the 1970s,” concludes the report. “Even if embedded for only a few months, it can be difficult to keep up with these expectations with such great excitement.”
What do you think about the Deutsche Bank report warning the US about rising inflation? Let us know what you think about this topic in the comment section below.
image credit: Shutterstock, Pixabay, WikiCommons, Deutsche Bank,
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell any products, services, or companies, or a recommendation or endorsement of any products, services or companies. bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the Company nor the author is responsible, directly or indirectly, for any damage or loss alleged to be caused by or in connection with the use or reliance on any materials, goods or services mentioned in this article.