Three or four quarter point rate increases in 2022 won’t be nearly enough to curb inflation. The Fed does not have the luxury of taking interest rates anywhere near the Volcker-era Fed. Thus, inflation is likley to persist for an extended period of time measured in years not months. Further, we do not believe that CPI levels have peaked. Oil can go much higher than current levels. In addition, the 20% year-over-year real-world rent price increases ought to start appearing in the housing survey data the Fed uses, although it is difficult to know exactly when given the Fed’s survey is based on hypothetical questions posed to residential property owners rather than actual market data. Consumer prices will eventually reach a level where consumers throttle back spending which will alleviate supply constraints and uppward pricing pressure. The counter to this phenomenon will be upward pricing pressure created by the forthcoming infrastructure spending program ($1 trillion over 10 years) and the $2 trillion in social spending programs. However, it will be a cold day in Dante’s Hell before either program comes close to budgeted cost. There is no reason why for example the the $1 trillion in infrastructure spend won’t balloon to $4-5 trillion (or more), as various “one-time” unforeseen expenses are incurred. Thus, there is upside risk to inflation caused by each Government program.