Earlier this month, I wrote a blog about inflation possibly having peaked which you can read here.
Today, I present a chart from Morgan Stanley which overlays headline CPI in the USA and the Money Supply (M2 for Sept/22).
As you can see, the correlation between CPI and M2 is extremely high. Has inflation peaked? I think so.
And I bet the Fed goes 1, maybe 2 more times and then tries hard to hold rates where they are but will become not inflation-dependent, but market and US$ dependent before adjusting rates to alleviate any further pressure on both those two line items.
That’s it for this blog…I think my shortest ever.