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Read this Periscope for insights into the future of inflation and how long it may last!
Doubleline Research Says…
Recently, Ryan Kimmell with Doubleline gave us his company’s forecast for inflation. In brief, Doubleline believes inflation will last longer than most analysts are predicting. They are a little gloomy. Ryan looks at it from what he calls top-down, then from the bottom-up. The bottom-up approach, by the way, is one of the things that makes his company’s research unique, and one of the reasons we trust them with some of our investments.
If you don’t know what people mean by a top-down approach, count your blessings. You must have interesting friends. For me, stuck as I am with investment managers as friends, listening to anything top-down is like listening to Charlie Brown’s teacher. But… think of top-down like the stuff you hear/read/see from the prognosticators who make the rounds on television, YouTube and social media. Top-down begins with the conclusion, then gathers data. The formula is simple:
Big announcement about a major economic data point -> predicts -> this major economic data point (+ a lot of emotive and expressive commentary!)
The top-down predictions on inflation are dire. We have the lowest unemployment in 20 years. We have the fastest wage growth in about the same amount of time. These data points predict inflation will continue to rise.
On the other end, the bottom-up approach takes the data points, then looks at the big picture. Ryan is a smart guy, and Doubleline has great slides. If you would like to understand why we have inflation, skip to the last 10 minutes of the inflation video here:
