If inflation was such a concern, the treasury long bond would be much higher, instead of going lower, nearing pandemic lows. Debt is deflationary, as increased mandatory payments reduces discretionary income which reduces demand pull inflation. But the distorted economic environment at the moment is pandemic related, and therefore, extremely little historical precedence for reopening or reclosing with variants, etc. More subtle is that technology advancement is deflationary as well. Technology advancements has increased human productivity so much at that fewer employees are needed, resulting in an increased labor competition for higher salaried jobs, of which there are fewer and fewer. I have lived that world for the last 40 years, both as a programmer eliminating jobs, and a job seeker trying to maintain employment and grow my income, and save for retirement.
So that brings us to the pandemic where the labor market has been turned upside down, with many boomers retiring, many technology advancements, many forced to close businesses having to rehire employees, and never assume that they are the same employees in very transient independent workforce employees who work hourly, with labor skills. Rehiring will take time through any hr process, and we have professional friends who have found the HR processes broken as well from the pandemic.
So yes, there will be labor inefficiencies and labor inflation passing through the system, which will be offset with more technology spending for more automation, which will keep a lid on accelerating inflation. . . but the future is uncertain, and will always be uncertain, so accelerating inflation may or may not occur, even if your quant forecast has an R squared of greater than 90% with pandemic history on this magnitude included,
And I am looking to change jobs for a better opportunity with job openings galore and lack of experience and talent applicants so that I get a better lifestyle balance with less salary. . .
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