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Otavio (Tavi) Costa, portfolio manager at Crescat Capital, analyzes the latest ISM report as highly stagflationary.
Costa highlights that prices paid have surged to 3-year highs while employment levels have dropped to 2-year lows. He suggests that, if these trends continue, policymakers are likely to ease monetary policy during periods of economic weakness, even if inflation remains elevated.
Costa previously highlighted that Argentina's money supply is contracting at a double-digit rate while global credit expands. He has also flagged declining inventories and weak sector capex in the energy industry. These observations come as policymakers assess the latest signs of stagflation in the U.S. economy.