Sao Paulo – One of the themes that has shaken the financial market the most is the fear of high inflation in the United States. Although the stock market has been in a state of panic for several days due to recent reports, the Federal Reserve (US Federal Reserve) continues with a speech that high inflation is on the rise.
The two most important names on the market in recent years have very different views on this situation. On the one hand, Ben Bernanke, former chairman of the Central Bank between 2006 and 2014, agrees that inflation should not rise with the US BC, while on the other hand, Mohamed L-Erian, economist and chief adviser to the Alliance Group, is very concerned about the risk of inflation.
During the panel Expert XPBernanke discussed his views, and Bernanke sees high inflation as a matter of passing, especially since it was longer than Federer’s 2% target for a period above this level of “normal”.
Nevertheless, he acknowledges that inflation is higher than expected, citing a number of factors, including economic reopening and highlighting, for example, and explaining certain types of used cars. See that the display should be upside down over time.
The economist also recalled the debate on inflationary pressures in the recently approved trillion-dollar package in the US Congress, but according to him, “aimed at infrastructure projects, we are talking about things for the next 10 years.” In addition, commodity prices fell and remained very stable in the middle of the year, indicating very moderate inflation for the coming months.
According to Bernanke, it is true that high price inflation carries risks, along with the impact on rental prices, which is coupled with rising home prices. There is also the context of impact on the supply chain, for example, closed ports, which can bring further inflation problems.
The former central president says some banks are proposing higher inflation, but when viewed from a broader perspective, inflation forecasts are closer to what the central bank is comfortable with.
L-Erian began his response by saying he wanted to be wrong in his view, but he was very concerned about the current situation. He says that while there is a lot of talk about CPI (consumer inflation), PPI (producer inflation) is high, which indicates that there is high inflationary pressure.
Companies no longer believe inflation will be temporary, but he says inflation will last a long time. “I spend a lot of time talking to companies, they don’t think inflation is short-lived. So, many of them have already started raising their prices, hoping that inflation will last longer,” he says.
“We need to be open-minded about the potential for higher and sustained inflation,” he added, stressing that the United States should not return to the 1970s level, but even more than initially planned.
According to the economist, the supply chain is not a short-term impact because they are “redesigned” in a situation where companies focus on flexibility.
Meanwhile, he sees the problem of the labor market as a “puzzle” in which no one knows what will happen, with more than 10 million jobs. “We believe this is temporary,” he says, highlighting the difficulty in projecting impacts.
Their divergent views also lead to very different forecasts, while Bernanke sees next year’s inflation hovering around 2.5%, saying he is more comfortable with L-Erian prices “rising close to 3% rather than 2%”.
The pair discussed large economic models, pointing out that L-Ariane cannot capture large structural changes, that it is essential to have close contact with Fed companies and to use other means to understand victims in strong situations. Current
Finally, he stressed that his disagreement with Bernanke was about the path we should take, not about where America was going.
“Me and him [Bernanke] We do not think differently in terms of fate. If you ask us what we see for the future of the United States and the economy five years later, I think we are not going to be too different about what fate will look like. What we differ about about travel is that my concern is that travel can be unnecessarily turbulent […] I agree with Penn, we will emerge as a more productive economy, but this process will lead to [que preocupa]”, He concludes.
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