Inflation Q&A Part I: Is Hyperinflation Coming?

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Inflation Q&A Part I: Is Hyperinflation Coming?

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Jun Jiang Jason Chen Stephen Radis
FEB 15, 2022

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Key Takeaways

  • After a recession, inflation typically rises, driven by a recovering labor market, growing consumption, and higher commodity prices, etc.
  • Since 1990, U.S. inflation has correlated more closely with global inflation.
  • Many secular, disinflationary forces remain at play: advances in technology, globalization, a lower dependency ratio, high private debt, well-anchored inflation expectations, and rising inequality.
  • Given the record low levels of the velocity of money and M2 money multiplier, we do not expect sustained, high inflation.

After years of a market focus on the risk of disinflation or deflation, inflation has reemerged as a hot topic. There are many inflation-related questions in investors’ minds. Here are answers to a few of the most commonly-asked questions.