Are asset inflation and its bellwether, the euro, really heading into a new spring following a winter marked by the now-fading scare of Fed disinflation (alternatively described as “restrictive monetary policy”)? A computer powered by artificial intelligence might well conclude so, based on reading a million websites.
Yet there are grounds for skepticism. The laboratory of financial history is replete with examples of both Indian summers of asset inflation that fade quickly (so-called bear market rallies) and alternatively of premature celebration about disinflation when in fact a new virulent inflation episode is emerging.