Inflation will be 'brutal' in short run: Legendary investor Bruce Greenwald

finance.yahoo2021-05-27

Federal Reserve officials this weekreiterated their support for loose monetary policyand downplayed the threat of inflation, despite a recent report that showed in April the Consumer Price Index (CPI)...

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Comments

Jazling
2021-05-28
Jazling
Comment pls
Fam_Fam87
2021-05-28
Fam_Fam87
Hodl
Garanguni
2021-05-27
Garanguni
Hmm
Khoogl
2021-05-27
Khoogl
Like
The_scalper
2021-05-27
The_scalper
Too early to tell. The whole world has been fed with zero/Low interest rate drugs for too long.
ryanlow
2021-05-27
ryanlow
wow
- ryanlow:
  wow

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Because Fed policies didn't cause the inflation spike, the central bank lacks the capacity to rein it in, he said.Instead, Greenwald says the Biden administration's support of a waiver of intellectual property rights for COVID-19 vaccines \"scared the crap\" out of companies that fear adverse government intervention in their day-to-day business. In turn, companies have raised prices to get ahead of other potential government actions, Greenwald said.\"I think in the short run, [inflation] is going to be brutal,\" Greenwald tells Yahoo Finance.'Fiscal policy has never worked particularly well'Speaking to Yahoo Finance's Brian Cheung, Federal Reserve Vice Chair Richard Clarida on Tuesdayacknowledged the \"risk case\" of persistent inflationbut said the Fed could \"offset\" such pressures if necessary.Greenwald, a professor emeritus at Columbia Business School, sharply disagrees with that view. Loose monetary policy isn't the cause of inflation, since the Fed's approach began at the outset of the pandemic but inflation only took hold in recent months, Greenwald said.\"When we gave all this extraordinary monetary expansion, all the quantitative easing of buying bonds and so on, it had no detectable effect on the macro economy,\" he says.\"It strikes me as very odd to think monetary policy, at least, is going to have any effect on it going forward, which means that [if] inflation takes off, we're going to have a tough time controlling it with monetary policy,\" he adds. \"Fiscal policy has never worked particularly well.\"Since last March, the Fed has undertaken a loose policy of near-zero interest rates and the purchase of $120 billion in bonds each month. Economic observers have widely credited the monetary policy — along with trillions in fiscal stimulus — for softening the downturn caused by the pandemic.But some economists, like former Treasury Secretary Larry Summers, warn that the hot economy is ripe for ongoing inflation. The Biden administration is closely monitoring inflationary pressures but so far has determined that the trend will be temporary,The New York Times reportedlast month.The Bureau of Economic Analysis on Friday willrelease new inflation datawith the Personal Consumption Expenditures (PCE) Index figures for April. That index rose 2.3% in March, after jumping just 1.5% in February.According to a Morning Consult survey of 2,200 adult shoppers, one-third of those surveyed say that they are paying more for groceries, especially red meat and chicken. (Photo by Justin Sullivan/Getty Images)MoreSpeaking to Yahoo Finance, Greenwald said the primary cause of recent inflation is the U.S. decision earlier this month tosupport a waiver of intellectual property protectionon the COVID-19 vaccine. The Biden administration took the position in order to make available generic, affordable versions of the vaccine.\"I think the event was actually not monetary or fiscal policy,\" he says. \"I think it was the vacating of the vaccine patents.\"Amnesty International and Human Rights Watchcalled for the waiverlast December, and the Biden administration began considering it in April,Reuters reported. Despite U.S. support for the waiver, negotiations at the World Trade Organizationface significant oppositionfrom some member countries and could take months to complete.But the unusual U.S. intervention in intellectual property protection scared companies and drove a hike in prices, Greenwald said.\"I think businesses are going to look at that and say, 'Holy s***, these guys are not my friends, I got to protect myself,'\" he says \"The easiest way to do that is to raise your prices, and when all the other local businesses raise their prices too, you don't even lose that much business.\"\"I think when the government scares these firms, they're just not interested in investing in the future,\" he says. \"I think the government has scared the crap out of them, and they're going to protect themselves by using the pricing power that they have.\"","kind":null,"is_publish_news":false,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":135824393,"gmtCreate":1622158581312,"gmtModify":1704180419710,"author":{"id":"3566821013640470","authorId":"3566821013640470","name":"Jazling","avatar":"https://static.tigerbbs.com/85e0a83573d9307f57fca9b2baed72af","vip":1,"crmLevel":5,"crmLevelSwitch":1,"idStr":"3566821013640470","authorIdStr":"3566821013640470"},"htmlText":"Comment pls&nbsp;","listText":"Comment pls&nbsp;","text":"Comment pls","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135824393","repostId":1136302481,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":135833087,"gmtCreate":1622156556849,"gmtModify":1704180357504,"author":{"id":"3574492498982218","authorId":"3574492498982218","name":"Fam_Fam87","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":0,"idStr":"3574492498982218","authorIdStr":"3574492498982218"},"htmlText":"Hodl","listText":"Hodl","text":"Hodl","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135833087","repostId":1136302481,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":135963882,"gmtCreate":1622126460446,"gmtModify":1704179998614,"author":{"id":"3578052060422870","authorId":"3578052060422870","name":"Garanguni","avatar":"https://static.tigerbbs.com/73381070bfa8dd924759f4a68c7e0305","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3578052060422870","authorIdStr":"3578052060422870"},"htmlText":"Hmm","listText":"Hmm","text":"Hmm","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135963882","repostId":1136302481,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":135963392,"gmtCreate":1622126448716,"gmtModify":1704179998453,"author":{"id":"3566032787349185","authorId":"3566032787349185","name":"Khoogl","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3566032787349185","authorIdStr":"3566032787349185"},"htmlText":"Like","listText":"Like","text":"Like","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135963392","repostId":1136302481,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":135982105,"gmtCreate":1622126206507,"gmtModify":1704179990008,"author":{"id":"3579590433924918","authorId":"3579590433924918","name":"The_scalper","avatar":"https://static.tigerbbs.com/b3fede485fa71d42dc4ea08960ab3e00","vip":1,"crmLevel":2,"crmLevelSwitch":1,"idStr":"3579590433924918","authorIdStr":"3579590433924918"},"htmlText":"Too early to tell. The whole world has been &nbsp; &nbsp;fed with zero/Low interest rate drugs for too long.&nbsp;","listText":"Too early to tell. The whole world has been &nbsp; &nbsp;fed with zero/Low interest rate drugs for too long.&nbsp;","text":"Too early to tell. The whole world has been fed with zero/Low interest rate drugs for too long.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135982105","repostId":1136302481,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":135988636,"gmtCreate":1622126136825,"gmtModify":1704179987572,"author":{"id":"3578697890023823","authorId":"3578697890023823","name":"ryanlow","avatar":"https://static.tigerbbs.com/ef1ede5b3203c87007bdaeb19d8327f4","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3578697890023823","authorIdStr":"3578697890023823"},"htmlText":"wow","listText":"wow","text":"wow","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/135988636","repostId":1136302481,"repostType":4,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":4472627,"gmtCreate":1622126149279,"gmtModify":1680791377498,"authorId":3578697890023823,"author":{"id":3578697890023823,"idStr":"3578697890023823","authorId":3578697890023823,"name":"ryanlow","avatar":"https://static.tigerbbs.com/ef1ede5b3203c87007bdaeb19d8327f4","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":135988636,"type":1,"supId":0,"prevId":0,"content":"wow","text":"wow","html":"wow"}],"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":42,"commentSize":15,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/1136302481"}