Forget inflation, Jefferies says to watch out for a 'disinflation era' like the early 1980s

Paul Volcker, Chairman Federal Reserve Board, speaking at Domestic Policy Subcommittee meeting. (Credit: Diana Walker—Getty Images)

Inflation was the most pressing concern of Americans in 2022 as prices for everything from gas to wheat soared to record highs. Year-over-year inflation, as measured by the consumer price index, hit a 40–year high of 9.1% in June, but then retreated rapidly—and Jefferies argues that the trend will continue over the next year.

“U.S. inflation has peaked,” Desh Peramunetilleke, the investment bank’s global head of microstrategy, wrote in a Thursday note. “Disinflation is a key assumption for our roadmap for 2023.”