Investors Are Still Fighting Last War On Inflation

Is war-related inflation set to crush Americans’ purchasing power? Some pundits suggest so, citing government data earlier this month showing real (inflation-adjusted) wages falling -0.1% m/m in May—their third consecutive monthly decline.[i] Higher gas, headlines said, ate all Americans’ raises over the last year … and then some. Now, we don’t deny higher gas prices pinch. But this strikes us as a case of investors fighting the last war—in this case, the hot inflation that contributed to 2022’s shallow bear market—and not a harbinger of weakening consumption. Read Full Article »