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Inflation expectations peak?
As I detailed last week in Inflation-cycle déjà vu, commodity prices lead inflation expectations, and inflation readings are a lagging economic indicator. Because commodities and commodity futures are widely stockpiled and traded by speculators, users and producers alike, prices can wildly disconnect from supply and demand factors and, hence, mislead inflation expectations. As shown below in my partner Cory Venable’s updated chart of the commodity index since 2007 (CRB- a basket of 19 commodities-39% energy contracts, 41% agriculture, 7% precious metals and 13% industrial metals), the 110% rebound in commodity ... (full story)