Inflation Signals and Household Wealth

By Blu Putnam, Chief Economist
Erik Norland, Senior Economist
CME Group

Prices for commodities like lumber, corn and soybeans are surging.
The gains have lifted inflation expectations to their highest level since 2013.
But these markets are in backwardation, where future prices are relatively lower.
Are these commodities signaling that higher inflation might peter out over time?

Household wealth rose by 10% during pandemic, fell 20% during Great Recession.
U.S. savings rose to 20% of income during pandemic vs. 7.5% during 2008 meltdown.
Will high savings lead to a surge in consumer spending once pandemic is over?
A wave of consumer spending might not be positive for equities, bonds.