21 June 2021

Dee Feat Is In Dee Flation - part the forty first

As mentioned by-the-way in these missives, the 'inflation' that followed the vaccination success of Sleepy Joe and the Northerners (a Classic Rock group if ever there were one), didn't last long. Yet more reporting that supply has begun to emerge now that demand is reckoned to be stably returned. Surprise surprise.
It's a dance of supply and demand that has reassured many experts and the Federal Reserve in their belief that painful price spikes for everything from airline tickets to used cars will abate as the economy gets back to normal.

"Many of the extreme price spikes we've seen in recent months are likely to reverse for Econ 101 reasons," said Jan Hatzius, chief economist at Goldman Sachs.

Lumber prices in the futures market, for example, are down more than 45 percent from their peak, slipping below $1,000 for the first time in months. That's still high — between 2009 and 2019, prices averaged less than $400 per thousand board feet — but the sell-off has been gaining momentum over the last few weeks. The price has fallen in 11 of the last 12 trading sessions, including a 0.5 percent drop to settle at $900.80 on Friday, according to FactSet data.
Told ya so.

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