Taps Coogan – April 1st, 2022

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The following chart, from the Daily Shot, shows that inflation adjusted disposable income has dropped below the pre-Covid trend as real wage growth continues to lag inflation.

As we recently noted, consumer sentiment has plunged to levels typically only seen during recessions and parts of the yield curve are now inverting (though not the parts typically used for forecasting recessions).

With the M2 money supply still growing at the fastest pace since 1983 and QE having ended just a few weeks ago despite nearly a year of inflation overshoots, it’s pretty hard to imagine inflation getting back to 2% anytime soon.

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