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Is Rising Inflation About To Hit U.S. Economy In Big Way?

ByChris Kimble
Published 02/24/2021, 02:20 PM
Updated 07/09/2023, 06:31 AM

Long-Term Oil And 10-Year Yields.

Inflation seems to be a thing of the past, but current trading in bond and commodity markets tell us that it could become a thing of the future.

Inflation hasn’t been an issue, or even on our radar, since the 1980s. Sure, the 2007 surge in oil prices offered some concern, but the financial crisis killed any thoughts of inflation.

So what’s got us concerned about inflation in 2021?

Today, we take a look at long-term charts of two potential inflation indicators:crude oil and 10-Year Bond Yields. Both have been mired in longer-term downtrends but both have rallied sharply higher of late.

A multi-year resistance/breakout test is in play for crude oil and bond yields at the same time at (1).

As most of you know, inflation-themed investments have done well in 2021. If breakouts take place here, they should do very well going forward. And perhaps it would be a strong signal that inflation is real again. Stay tuned!

Latest comments

It's true that we can expect a inflation. But it's important what kind of inflation will occur, respectively in which degree. It's well known that economic policies prefer a modest inflation of 2-3%, which is actually very stimulating for a free market economy. This kind of inflation would support a robust economic recovery and would be bullish for the stock market. On the other side, if the inflation gets out of control and developes into a hyperinflation, a interest rate increase is inevitable. Following that we could have a prolonged recession and possibly a stock market crash. The question is, wether the FED can hold the balance and balance possible government fiscal interventions. It's not a easy game to play.
SoJerome Powell nixes inflation concern and then we have this commentary in same dayWhos right and whos wrongKimble puts up the pudding from what Ive seenOther than of course printing press running low on ink that is
Printing trillions of dollars has no consequences. Right?
You’re not paying for it. If US can afford to give other countries billions we can afford to treat ourselves now when we need it most
printing and debt from gov. have consequences. Always.!
the worst was hungary from 1945 to 1946....from info "Imagine that during the time it took to drink a cup of coffee, the price of that cup of coffee doubled. "...
May be wheelbarrows will be handy as they used to be in Weimar Republic - very convenient to carry cash to buy bread..and do not leave your wheelbarrow  unattended.  Very often thief will through away cash and run away with wheelbarrow.
how can people keep talking about higher inflation when we are experiencing a pandemia, people have no jobs, and half a million is dead? Pure stock market manipulation? Insane?
Maybe the fact US Gov has pumped $4 Trillion into the economy and US Fed another $6 Trillion in Bond purchasing in past 12 months. Looks like Biden going to throw another $3.9 Trillion on top by end of the year ($1.9 Trillion in Stimulus and $2 Trillion in 'recovery investment'). Only 25% of the economy is still closed (mainly retail, travel and tourism). Any recent IPO, bitcoin, stock market shares, even baseball cards etc all pointing to a market flush with money and not knowing where to invest it to get ROI. EVERYONE agrees there will be reflation by Q3 - just not sure how bad it will be by this time next year to turn it into inflation .
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