‘Shocking’ inflation numbers will fall back to earth and hurt reopening trades, economist David Rosenberg predicts

‘Shocking’ inflation numbers will fall back to earth and hurt reopening trades, economist David Rosenberg predicts

Economist David Rosenberg believes the bond market is getting inflation right and yields shouldn't trade at higher levels. His reasoning: Inflation as a temporary phenomenon caused by enormous pent-up demand and supply chain issues connected to the coronavirus pandemic. "The numbers have been shocking to the upside, no doubt about it. But it's pretty easily explainable," the Rosenberg Research president told CNBC's " " on Friday. "I don't understand why people want to superimpose these last couple of months into the future." So far, the bond market is shrugging off inflation. The benchmark hit its lowest level since March 3 on Friday and closed at 1.45%. The yield is off 7% over the last week and down almost 11% over the past month. Sliding yields have been on Rosenberg's radar for months. " Rosenberg called the bond market "radically oversold" and predicted the 10-year yield would retreat to 1%. At the time, the yield was around 1.5%. "There is just so much ," said Rosenberg, who served as Merrill Lynch's top North American economist from 2002 to 2009. "The most dangerous thing anybody can do is extrapolate what's happening now." In a note to investors on Friday, he wrote "I