OpinionMy opinion for what its worth is the Fed will have to increase rates a few more times
simply because the drivers of inflation will only be minimally effected by higher rates.
Those drivers as we all know are energy and supply chain issues. Gas & food, the
basics of living in the modern world will continue to be high. Raising rates will not
solve anything but it will makes things worse, a lot worse IMO.
The only way inflation can be halted is by the Fed raising rates high enough to crush
the economy, thereby causing high unempoyment and lowering most peoples ability
to buy and spend. It's the most brutal tactic there is but I see no other option. Nuttal
is right this time. Energy companies are not going to drill or spend on M & A. Shareholders are demanding immediate returns and are not interested in empire
building.
So what we have is structural based high energy prices for the foreseeable future.
This is a completely new paradigm that everyone including gov'ts are going to have
to live with. It is so different from every previous cycle for all the reasons Nuttal is
suggesting so that many investors, the general public and gov'ts are having difficulty
in coming to terns with. This paradigm shift is not going to go away and ones best
method of dealing with it is to invest and stay invested.