Jobless claims dipped below 800,000 for the first time since the pandemic hit and while the trajectory is good, the pace will take longer to recover without a vaccine, Peter Boockvar, chief investment officer of Bleakley Advisory Group, told Real Vision during today’s Daily Briefing.
Boockvar said that we won’t have a fully functioning, normal economy until we get the vaccine because the timing of that determines the timing of so many jobs coming back.
Boockvar also discussed inflation expectations and said he’s been in the inflation camp for the last couple of months and he thinks it will be a key story in 2021. He’s looking at 30-year treasury bonds as a reflection of those expectations, and said the market is messaging not just inflation but also growth.
Boockvar explained that he pays attention to the 30-year bond because it is the least manipulated by the Fed, the furthest out, and the most market-friendly part of the yield curve. He expects inflation to be more cyclical than secular in this case, so what he’s looking for isn’t long-lasting but could cause some major disruptions in the long end of the bond market here and around the world if it were to occur, he said.
Boockvar also talked about inflation in the housing market, which so far has been a boon to the economy. However, he warned that the rise of prices has fully offset lower interest rates, so we should watch to see at what point it will slow the pace of transactions and price certain buyers out of the market.
To wrap up the interview, Boockvar said that the consensus seems to be that there’s no inflation and that rates are going to be low forever, but he believes we’re seeing too many signs of price pressures building for that to be true. It is selective right now, he said, but it is happening in areas like transportation and shipping.
Once a vaccine drives the return of demand, he expects supply will be squeezed and so there will be pricing power there.
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