6.8% Inflation - where is this going?

[Marcus Auerbach]

For the longest time people have predicting inflation, now we are at 6.8% in November after I thing 6.2% in October. The FED said this is going to be short term, but I have a feeling it's going to stay with us and leading us into an asset bubble. Where do you see this go long term? Is this like 2007, where we should all see it in the data, but we didn't?

There is a part of me that likes inflation for what it does no real estate debt, at least as long as wages are following and with that hopefully rents. So far I have not seen income grow that much for tenants. 

At this point I think it is pretty clear what we can expect from the housing market in 2022. And intererest rates are predicted to go up, but will the go up faster/longer and higher than generally expected (just like inflation itself?) and does that mean a change in startegy is on the table?

[Russell Brazil]

It was a monthly reading of 6.8%. And for comparison last Novemeber was 0.2%, and last October 0.0%...so the year over year inflation rate are being measured against a zero inflation environment. 

The yearly inflation rate is projected to be 4.8% for 2021, after 2020's 1.2% (the 2nd lowest since 1960). So we are on a 2 year average of 3%. So 3% per year worry anyone? Probably not. Does 4.8% even seem that concerning?  it is higher than the average....but that is how we get to averages...half the years are above the average, half the years below the average.

Will inflation be higher over the next decade than it was in the previous decade? More than likely yes.  But the current inflation rate is bumping up, because 2020 had virtually no inflation. Supply line disruptions and the cost of used cars (a normally deflationary asset) have put pressure on the CPI upward. 

Context matters.