High Factory Prices Aren’t Inflationary

High Factory Prices Aren’t Inflationary
Cargo containers are readied for transport at the Port of Baltimore in Baltimore, Maryland, on October 14, 2021. Brendan Smialowski/AFP via Getty Images
Steven Van Metre
Updated:
Commentary

Many pundits were spinning the inflationary story when factory prices continued higher in March, and they were quick to point out how rising factory prices will trickle down to consumer prices in the months to come. High factory prices must certainly mean high consumer prices, yet the data does not show a lagging increase in consumer prices when factory prices rise. History shows that high factory prices are deflationary and tend to be recessionary.

Steven Van Metre
Steven Van Metre
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Steven Van Metre, CFP, designs and manages unique investing strategies. He has a YouTube show where fans across the globe tune in to hear his thoughts on the global economy, monetary policy, and the markets.
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