The David Lin Report · Monday, June 29, 2026
Michael Howell argues that underlying inflation pressures in the US remain strong, citing a significant disconnect between low break-even inflation rates from TIPS and the higher four-year rolling average of the GDP deflator. He believes the Federal Reserve must act on these persistent inflationary forces.
“Well, I think the fact is that there's a there's an underlying inflation problem.”
“As you can see, that number is low, 2.5% but you look at the black dotted line, that is a 4-year rolling average of US inflation using the broadest measure of US inflation, which is the GDP deflator.”
“There is a big disconnect between those numbers and I think that the dotted line is the correct number. It may be coming down, but it's not coming down fast and so underlying inflation pressures are clearly there and therefore the Federal Reserve has got to act.”