Us consumer price inflation is likely to remain high in 2021 and above 4 per cent until at least 2022, billionaire Jeffrey Gundlach, founder and chief executive of DoubleLine Capital, said on Friday.
Ganglak quoted the pressure of rising housing costs and wages as saying that he believes that the current Qualcomm IncThe expansion is not temporary and is likely to continue into the future.
And we don't think inflation will be below 4% at any time in 2022. "
The latest figures show that CPI in the United States, including food and energy costs, is growing at an annual rate of 5.4%, the fastest in 30 years. The Fed's preferred core PCE price index rose 3.6 per cent from a year earlier, well above its 2 per cent target.
Fed officials insist that the current price rise is temporary and is caused by supply chain shocks, abnormal demand for goods and labour shortages, all linked to the COVID-19 epidemic.
While Mr Gunrac acknowledges that some price increases, such as wood and other commodities, are temporary, others are not.
One factor he mentioned is the cost of housing, which accounts for about 1/3 of CPI, which has been rising steadily this year.
"it is almost certain that we will experience persistently high inflation because of rising housing and wages," he said.
The result, he says, is negative real interest rates because government bond yields are still low and inflation is high. From an investment point of view, he called negative interest rates "very unattractive".