I somewhat agree here. Unlike the inflation believers, I think Americans are caught in a liquidity trap. There are more dollars to spend on things since we aren't paying for as much gas or extracurricular events. Things such as get-togethers, travel, sports, restaurants, entertainment, are not available for purchase due to shutdowns.
Aging populations are deflationary. So are younger minimalist ones that can't take that trip to a Costa Rican volcano to find that perfect instagram pic.
David Rosenberg of Rosenberg Research argues that investors have, perhaps, gotten used to politicians going down to the wire to get deals done. Then there’s the fact that Americans have been saving like mad since the coronavirus crisis began and were sitting on $3.4 trillion at the end of June. “So maybe, just maybe, Mr. Market is looking at the ‘fiscal cliff’ as an unnecessary cause for worry,” Rosenberg writes.
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