While several market strategists and analysts expect US inflation to fall significantly in 2023 compared to last year, Michael Wilkerson, founder of Stormwall Advisors, believes the inflation rate could rise as high as 12% by the end of this year. The country’s rate of inflation has cooled over the past seven months, but Wilkerson insists the US central bank is “going to run out of firepower”.
Stormwall Advisors’ Michael Wilkerson believes the US will “see another rise” in inflation
Over the past two months, many reports have stated that inflation has peaked, and in the United States, the Consumer Price Index (CPI) has fallen for seven consecutive months since its peak in June 2022. In a recent interview between Kitco News anchor Michelle Makori and Michael Wilkerson, founder of Stormwall Advisors, Wilkerson expressed his expectation of another increase in US inflation. While acknowledging that his view is in the minority, Wilkerson stressed that “inflation doesn’t move in a linear path; you see some cycling.”
Kitco News anchor Michelle Makori (left) and Michael Wilkerson (right), the founder of Stormwall Advisors.
“I don’t think we’ve seen the end of inflation, and I think we’re going to see another increase,” Wilkerson said during the interview. “Whether it’s 8% or 12%, nor can I say exactly what it will be by the end of 2023, but I think it’s possible that we’ll be back in that range this year.”
Wilkerson explained how the M2 money supply has grown since 2008 and has increased further during the Covid-19 pandemic. As head of Stormwall Advisors and author of “Why America Matters: The Case for a New Exceptionalism,” Wilkerson argued that the increase in the money supply inevitably results in a concomitant increase in prices, as evidenced by historical patterns. He believes that from the perspective of policymakers, inflation is preferable, as it is the “lesser of two evils.”
“The Fed is going to run out of firepower,” Wilkerson told Makori. “Ultimately, this becomes a trade-off between curbing inflation, killing the inflationary dragon and allowing recession and unemployment to rise. And governments, always and everywhere, choose inflation,” he added.
However, several analysts and economists believe that inflation will decrease this year. Economist Mohamed El-Erian of the University of Cambridge, for example, expects inflation to be “sticky” at around 4% in the middle of the year. Adam Posen, the president of the Peterson Institute for International Economics and a former official at the Bank of England, expects inflation in the US to reach 3% by the end of 2023. “Coming from the high inflation where we are now towards 3% is baked. in”, said Posen at the end of December 2022.
During the conversation with Makori, Wilkerson shared an opposite view, stressing that price growth would eventually catch up. “The money supply increased by 40 percent just from the year 2000,” Wilkerson said. “There has never been a time in history when the money supply increased so much without resulting in inflation – inflation always catches up with inflation in the money supply.”
Tags in this story
3% range, Adam Posen, analysts, Bank of England, consumer price index, contrarian view, Covid-19 pandemic., economic outlook, financial markets, high inflation, historical patterns, inflation dragon, inflationary pressure, M2 money supply, market strategists , Michael Wilkerson, mid the year, Mohamed El-Erian, money supply inflation, Peterson Institute for International Economics, policymakers, price growth, recession, sticky inflation, Stormwall Advisors, Surge, US Federal Reserve, US inflation, Unemployment, University of Cambridge
Do you agree with Wilkerson’s contrary view of inflation, or do you think the predictions of other economists will hold true? Share your thoughts on this topic in the comments section below.
Jamie Redman
Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.
Image credit: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
