Monetarists were right on COVID inflation but erred calling recession, Dario Perkins notes

Monetarists were right on COVID inflation but erred calling recession, Dario Perkins notes
Monetarists wrong on recession warning

Dario Perkins draws attention to the shift in views among monetarists who accurately tracked COVID-related inflation by following money supply trends.

Perkins points out that these same monetarists later became strongly bearish, warning about recession risks as the money supply began to contract—a forecast he criticizes as being misguided.

Perkins has previously examined how lingering seasonality in core CPI data since COVID may affect expectations for a September rate hike, as detailed in his recent analysis. He has also questioned strong market and Fed reactions to minor month-over-month inflation changes in an earlier report. These topics highlight continued debate over interpreting inflation and monetary policy signals.

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