Citi’s Matt King on Why Inflation Isn’t Transitory and the Fed May Induce a Recession

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.4 • 1.6K Ratings

🗓️ 4 November 2021

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

Inflation is elevated these days, and markets around the world are pricing in rate hikes. However, risk assets like stocks are doing just fine. There seems to be some presumption that any Fed rate-hiking cycle will be mild and that ultimately inflation will settle down without too much further pain. Matt King, the Global Markets Strategist at Citigroup, isn't convinced. On this episode, he explains why what we're seeing now is the impact of a big "whack" to the global economy, one which has no natural mechanism to rediscover equilibrium or balance. He believes that, for the Fed to actually tame this inflation, it may need to go further than just modest hikes, and move aggressively to tamp down demand, possibly creating a recession.

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0:00.0	Adlots is brought to you by Apollo.
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0:30.0	Hello and welcome to another episode of the AdLots Podcast.
0:43.0	I'm Tracy Alloway.
0:44.5	And I'm Joe Weisenthal.
0:46.8	Joe, doesn't it feel like supply chains are everywhere at the moment?
0:52.1	Yeah, so we're recording this November 1st.
0:55.8	I saw like three or four, maybe five supply chain related Halloween costumes
1:01.4	like on Instagram this weekend.
1:04.0	No, I don't think like kids themselves are excited about dressing up as something
1:07.5	supply chain related, but it definitely seems like for a certain group of adults,
1:11.6	that was like a very like humorous like, you know, spooky thing this year.
1:15.3	Yeah, I saw a pumpkin that had supply chains carved into it,
1:18.8	which I thought was phenomenally spooky.
1:21.1	But I mean, it is true that this is the issue that everyone is trying to wrap their heads
1:26.2	around at the moment.
1:27.3	And to be honest, I feel like it's not something that most economists have necessarily,
1:33.6	or most macro analysts have necessarily had to think about in detail before.
1:38.6	Like obviously everyone talks about inflation.
1:41.8	People think about what's driving that, although I still maintain that we actually don't
	...

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