Many market strategists and analysts anticipate that US inflation will decline substantially in 2023 compared to the previous year. Michael Wilkerson, the founder of Stormwall Advisors, believes that the inflation rate could reach as high as 12% by the end of this year. Although the US inflation rate has decreased in the past seven months.
Michael Wilkerson of Stormwall Advisors Thinks US Could Experience Another Inflationary Spike
Recent studies in the US have highlighted a notable rise in inflation over the last couple of months. The Consumer Price Index (CPI) has declined for seven consecutive months since reaching its peak in June 2022. During an interview with Kitco News Anchor Michelle Makori, Michael Wilkerson, the founder of Stormwall Advisors, also expressed his expectation of a further increase in US inflation. Although he accepted that his opinion was a minority one.
“I don’t think we’ve seen the end of inflation and I think we’re going to see another spike,” Wilkerson mentioned during his interview. “Whether it’s 8% or 12% I can’t say precisely what it will be by the end of 2023 either, but I do think it’s possible we’ll find ourselves in that range again this year.”
The M2 money supply has been steadily increasing since 2008 and has continued to grow during the Covid-19 pandemic. As the author of “Why America Matters: The Case for a New Exceptionalism,” Wilkerson noted that historical patterns demonstrate that an increase in money supply invariably leads to an increase in prices. According to policymakers, inflation is the better choice since it’s the “lesser of two evils.”
“The Federal Reserve is going to run out of firepower,” Wilkerson told Makori. “In the end, this becomes a trade-off between controlling inflation, slaying the inflationary dragon, and allowing recession and unemployment to rise. And governments everywhere always choose inflation,” he added.
Many economists and analysts believe that inflation will decrease this year. For instance, economist Mohamed El-Erian from Cambridge University predicts inflation will remain “sticky” around 4% by the mid-year and Adam Posen, the President of the Peterson Institute for International Economics and a former Bank of England official, anticipates that US inflation will hit the 3% range by the end of 2023.
During his conversation with Makori, Wilkerson put forward a different view that cost inflation would ultimately catch up. “The money supply has increased by 40 percent since the year 2000,” Wilkerson noted. “There has never been a time in history when the money supply has risen so much without causing inflation: price inflation always catches up with money supply inflation.”
