Inflation fears are overblown — five reasons why you need to buy the dip in stocks

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OPINION: The Federal Reserve hiked rates so much in the late 1970s and early 1980s that it slammed the economy into a painful recession. Here’s why that’s not going to happen this time around, columnist mbrushstocks writes.

But like early concerns that Elvis Presley and rock ‘n’ roll would ruin the country, these are just false fears. So stocks are a buy every time the market hits replay on this song.

“If we see inflation coming down on its own, that would bring great joy and cheer to the markets,” says Ed Yardeni, of Yardeni Research. “That would mean the Fed doesn’t have to catch up in an abrupt fashion.”Reason #1: Supply-chain issues are a fixable problem Covid really screwed up supply chains, as lockdowns and worker illnesses got in the way. This created shortages, which drove up prices. But with Omicron shifting Covid into an endemic phase, supply chains are getting fixed.

Now, though, the free money is dwindling. Generous unemployment benefits have ended. President Joe Biden’s failure to get Build Back Better passed signaled the end of trillion-dollar Covid-era spending plans.The Fed will soon start trimming its balance sheet. This will ease demand pressures, too. As companies get more output from the same labor cost, they feel less pressure to pass their own cost increases on to customers. That is happening now. We know this because profit margins are holding up despite labor cost increases.

Reason #5: The dollar is strong A strong dollar reduces foreign demand for U.S. products. This cools off inflation in the U.S. That is happening now. This chart shows the tight relationship between the dollar and U.S. prices. The red line representing the dollar is on an inverted scale, which means it declines as the dollar strengthens. The blue line is prices.

 

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mbrushstocks Inflation lead's to recession, so how is that not going to happen

mbrushstocks I would strongly suggest for anyone reading the above article that you also read this one.

mbrushstocks For all those who are new to this working from home Bitcoin trading options Here's a little tip: Get a trusted Bitcoin expert and stick to her _elizabeth467 Invest and play at similar times each day. Because : In times of chaos, your investment is your anchor to success

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