Excerpt from U.S. News & World Report's "Retail Sales Dip in May"

By Tim Smart - June 15, 2021

David R. Kotok - In the News


The Fed has indicated it believes the recent run-up in prices is temporary, but some are wary that once inflation expectations take hold, it affects buying habits and actually drives inflation.

Lumber provides an example of the difficulty the Fed has determining what is inflation that will stick and what is transitory. Prices have soared to roughly three times what they were a year ago as the housing market grew red hot in the middle of the coronavirus pandemic. But as houses became scarce and the price of homes reached record levels, buyers began to pull back. Now, the price of lumber has fallen sharply, though still higher than normal.

"The surge that reflects the recovery from the extraordinary bottom in March and April of last year is slowing, and we expect it to slow further," Cumberland Advisors Chairman and Chief Investment Officer David Kotok wrote Monday. "How much it slows remains to be seen. And what will that slowing do for the various pressures in financial markets and in the economy as we come off this rocket ship of an upward surge and start to plateau and flatten out?"

Read the full article at https://www.usnews.com

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David R. Kotok
Published Date
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U.S. News & World Report