Inflation: Twin Peaks Again?

Check out the accompanying pdf and chart collection. Executive Summary: With oil prices spiking again, we can’t help but think of the 1970s when two peaks in oil prices fueled the Great Inflation and caused two recessions. We don’t see history repeating in this case, however. The big difference this time is the disinflationary tech-driven productivity boom we expect this decade. … But we are concerned enough about the oil price spike, the ballooning federal deficit, and other recent developments to return our subjective odds of a recession before year-end 2024 to 25% from 15%. Notably, we don’t view that as the most likely scenario but as a risk to our happier rolling recovery outlook.