‘Clowns’ calling for inflation ‘just don’t get it’: Economist

While everybody seems to be talking about inflation these days following the sharp rebound in various economies and the effects of a recovery in oil prices, David Rosenberg is highlighting the risks of deflation.

The chief economist and strategist at Gluskin Sheff + Associates highlighted a peak in apartment rental rates, along with a rollover in heath care and tuition rates.

“The stronger U.S. dollar has caused import prices to recede in the past six months and that lag will soon be felt in the consumer data,” he said in the daily Breakfast with Dave report.

Rosenberg also pointed to frequent discounting in the retail space, as well as ongoing incentives from auto dealers.

With the current economic expansion now eight years old and running, the economist suggested pricing power is “elusive as ever.”

He believes competitive pressures from the likes of Amazon.com, coupled with efficiencies created by robotics and drone technology, are big drivers of deflation, and so too are demographics, as wage inflation remains contained.

“And yet the same clowns calling for higher inflation are the same ones that did the same thing and made the same mistake after ZIRP and then after all the rounds of QE in years past,” Rosenberg said. “They just don’t get it.”

The stronger U.S. dollar has caused import prices to recede in the past six months and that lag will soon be felt in the consumer data.” David Rosenberg