Mike Wilson, Morgan Stanley’s chief equity strategist for the US, expects “inflation to fall pretty sharply” between now and the end of next year. He told CNBC’s “Street Signs Asia” on Friday that consumer price growth could drop to 4% or 5% by June next year and back to 2% or 3% by the end of 2023. This is compared with October’s 7.7% increase from a year ago, which was lower than expected. Stocks rallied last week on investors’ hopes that top price gains were in sight. Investors have been closely watching comments from the US Federal Reserve for hints on when the agency might pause monetary tightening in its fight against inflation. But Wilson, who is also the chief investment officer of Morgan Stanley, warns that “we are in a new era.” “In other words, the economy will be less sluggish, especially in terms of labor and energy, which means that when the economy really picks up pace, inflation will come back and that will cause the Fed to slow down. cannot cut rates to zero again,” he said. Wilson added: “I don’t think the Fed will go to zero again because…inflation has come. So they have to deal with that.” It follows other calls that the era of cheap money is over, marking tough times ahead for areas like technology. Wilson added that markets are in a “booming environment” – with shorter, hotter economic cycles. “We think we’re entering a phase where the economic expansion will last somewhere between three and four years instead of an eight to ten year period, because monetary policy doesn’t offer a quick rescue,” he said. as in the past. – because inflation will be behind,” he said.Inflation is still more ‘sticky’ for these two sectors Wilson said there are still two areas where inflation could be more ‘sticky’: energy and labor “These are two areas where we have a little bit of a shortfall, and that would also put inflation higher than maybe 2% on a structural basis,” he said. a structured bull market, “it’s not even cyclical,” Wilson said. “I mean, it’s a new bull market for energy.” Energy is currently the only sector in the S&P 500 has been green since the beginning of the year, according to FactSet.