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U.S. inflation could hit 3% or 4% by the middle of 2022, veteran strategist warns

US and NATO ground forces are expected to be out of Afghanistan by September 11.(AP file photo)

US and NATO ground forces are expected to be out of Afghanistan by September 11.(AP file photo)

David Roche, president of investment firm Independent Strategy, is among them. He told CNBC on Wednesday that the U.S. inflation rate, which stood at 2.6% in March from a year earlier, could rise much higher.

“My own view is that we will see inflation of probably 3 or 4% by the middle of next year and that is completely inconsistent with, say, U.S. 10-year bond yields being at 1.6%. That yield could easily double, and when it does, then you come to the crunch point that markets are going to experience,” he told CNBC’s “Squawk Box Europe.”

“The reason prices will rise, and really there are a couple of things, is that you’re going to end up with, on the other side of Covid, huge demand as consumers spend the excess savings which they have accumulated,” he said.

“And you’re going to end up with big government forever … and that of course is less efficient and less efficiency means higher inflation.”

News Source: cnbc

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