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Kevin Hassett Prediction: 7% y/y Inflation by December 2021

Summary:
Remember this Kevin Hassett projection of Covid-19 deaths, from May 2020? Source: CEA archived. In this video, Kevin Hassett predicts (“almost for sure”) 7% year-on-year inflation by December. Figure 1: CPI – all (blue), and Hassett prediction of 7% y/y inflation for 2021 (brown square), and University of Michigan survey of consumers implied prediction (teal square), on log scale. Source: BLS via FRED, University of Michigan, and author’s calculations. This implies that month-on-month inflation June through December will average at least 7.3%, substantially higher than the 4% the University of Michigan’s June survey implied for the next year (through June 2022). Other Hassett predictions recounted on Econbrowser (a partial list): No recession by summer 2021. QE will cause inflation.

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Remember this Kevin Hassett projection of Covid-19 deaths, from May 2020?

Kevin Hassett Prediction: 7% y/y Inflation by December 2021

Source: CEA archived.

In this video, Kevin Hassett predicts (“almost for sure”) 7% year-on-year inflation by December.

Kevin Hassett Prediction: 7% y/y Inflation by December 2021

Figure 1: CPI – all (blue), and Hassett prediction of 7% y/y inflation for 2021 (brown square), and University of Michigan survey of consumers implied prediction (teal square), on log scale. Source: BLS via FRED, University of Michigan, and author’s calculations.

This implies that month-on-month inflation June through December will average at least 7.3%, substantially higher than the 4% the University of Michigan’s June survey implied for the next year (through June 2022).

Other Hassett predictions recounted on (a partial list):

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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