Tyler Goodspeed, the former chairman of the Council of Economic Advisers, predicted that inflation will continue into 2022 despite the Federal Reserve hiking interest rates twice next year. Goodspeed joined Maria on Monday to talk about high consumer prices, arguing that even two rate cuts may not cut it as the economy continues to grapple with supply chain and labor force shortages.
Even since Chair Powell gave indications of a faster taper and, you look at the inflation break. The possibility of rate hikes in 2022 is something that markets think it's going to have a cooling effect. I'm not so convinced because you have increased supply chain bottlenecks because inflation expectations have risen and you have all these supply chain bottlenecks. The reconciliation bill will be in place in 2022, with demand stimulator coming in. We still have a labor force participation problem. We are still short on business investment by $1.8 trillion. I think the bigger picture macro situation still points to a lot of inflationary pressure, and I don't know that the two rate hikes are going to cut it.