Market Strategist Michael Wilkerson Believes US Inflation Could Rise to 12% by Year-End Despite Predictions of Decrease

While some market strategists and analysts expect U.S. inflation to drop significantly in 2023 compared to last year, Michael Wilkerson, founder of Stormwall Advisors, believes inflation could rise to 12% by the end of this year. The country’s inflation rate has declined over the past seven months, but Wilkerson insists the US Federal Reserve “will run out of firepower.”

Michael Wilkerson of Stormwall Advisors thinks US will ‘see another spike’ in inflation

Over the past two months, many reports have indicated that inflation has peaked, and in the US, the consumer price index (CPI) has fallen for seven consecutive months since its high in June 2022. interview Between Kitco News anchor Michelle Macori and Michael Wilkerson, founder of Stormwall Advisors, Wilkerson expressed his expectation of another surge in US inflation. While acknowledging that his opinion is in the minority, Wilkerson emphasized that “inflation does not follow a linear path; you see cycling.”

“I don’t believe we’ve seen the end of inflation, and I do think we’re going to see another surge,” Wilkerson said in an interview. “Whether it’s 8% or 12%, and I can’t say exactly what it will be by the end of 2023, but I believe it’s quite possible that we will be in that range again this year.”

Wilkerson explained how the M2 money supply has grown since 2008 and expanded even more during the Covid-19 pandemic. As CEO of Stormwall Advisors and author of Why America Matters: The Case for New Exceptionality, Wilkerson argued that an increase in the money supply inevitably leads to a concomitant rise in prices, as evidenced by historical patterns. He believes that from the point of view of politicians, inflation is the preferred option, as it is “the lesser of two evils.”

“The Fed is about to run out of firepower,” Wilkerson Macori said. “Ultimately, it becomes a compromise between curbing inflation, destroying the inflationary dragon, and increasing recession and unemployment. And governments always and everywhere choose inflation,” he added.

However, some analysts and economists believe that inflation will fall this year. For example, economist Mohamed El-Erian of the University of Cambridge expects inflation to become sticky at around 4% in the middle of the year. Adam Posen, president of the Peterson Institute for International Economics and a former Bank of England staffer, expects U.S. inflation to hit the 3% range by the end of 2023. c, Posen said at the end of December 2022

During a conversation with Makori, Wilkerson shared the opposite view and emphasized that price inflation will eventually catch up. “The money supply has increased by 40 percent since 2000 alone,” Wilkerson said. “There has never been a time in history when the money supply increased so much without causing inflation—price inflation always catches up with money supply inflation.”

Do you agree with Wilkerson’s opposite view of inflation, or do you think other economists’ predictions will come true? Share your thoughts on this in the comments section below.