Michael Burry

Retail inventory gluts will bring US CPI disinflation later in 2022, leading the Fed to reverse its rate hikes and quantitative tightening.

“Deflationary pulses from this- -> disinflation in CPI later this year --> Fed reverses itself on rates and QT --> Cycles.”

Said on

27 June 2022 · Post on Twitter about the retail "Bullwhip Effect", linking a CNN story on retailer inventories

Source

Fed may reverse rate hikes · Humpdays (Substack)

Should come true

2022

How sure they sounded

stated as fact

Categories

Economy

Importance

3 of 5 · US inflation and Fed policy direction affect the whole US economy and global markets.

Outcome

Partly right

The disinflation part came true: CPI inflation peaked at 9.1% in June 2022 and fell to 6.5% by December 2022. The Fed did not reverse course, though. It kept raising rates until July 2023 and made its first cut only in September 2024, well after the window, so this is partial.

Evidence:

• https://www.bls.gov/news.release/archives/cpi_07132022.htm
• https://www.bls.gov/opub/ted/2023/consumer-price-index-2022-in-review.htm
• https://www.federalreserve.gov/newsevents/pressreleases/monetary20230726a.htm
• https://www.federalreserve.gov/newsevents/pressreleases/monetary20240918a.htm