Inflation Is Dead; Deflation Is At Hand

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Inflation is yesterday’s news. The Fed had already crushed it with all its rate hikes and the failure of Silicon Valley Bank and its collateral damage are ushering in deflation. While the Fed Futures are split on if the Fed will hike 25 basis points or not at all next Wednesday (March 22), their rate hiking cycle has been preempted. They can’t keep raising rates because they risk more blowups and a complete meltdown of the economic system. Long term bonds are sniffing this out and TLT is the best security in the market right now. As I wrote in “A Look Back At Next Year” (December 3, 2022): “TLT will be a monster in 2023.”

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