Tom Lee Says ‘Economists Are Fighting Last Year’s Wars’ As Fundstrat’s 2% Bitcoin Bet Swells To 85%

Tom Lee said inflation may be less severe than economists think while he remained bullish on Ethereum.

• Bitmine Immersion’s Tom Lee said about 60% of the gap between core PCE and core CPI is driven by portfolio fees and flash memory prices, which he said do not reflect household inflation. 
• Fundstrat’s 2% Bitcoin recommendation has grown to more than 85% of some client portfolios because of Bitcoin's price rise. 
• Lee said crypto may have already hit a bottom and also gave a positive outlook for Ethereum. 

Fundstrat Global Advisors' Tom Lee said he thinks “economists are fighting last year's wars”, arguing they are misreading today's inflation picture. Two odd-ball price categories, portfolio management fees and flash memory, make up about 60% of the gap between core price index (CPI) and core personal consumption expenditures (PCE), Lee said, which helps explain why the Fed's preferred inflation measure looks hotter than the inflation households actually feel.

Speaking in an interview with Wealthion, published Friday, Lee said, "I think economists are fighting last year's wars.” Lee said adviser fees are charged as a percentage of assets, so they rise when markets rise. PCE counts them, whereas CPI barely does. "The average American doesn't actually think there's inflation just because the stock market went up and they have to pay their advisor more money," Lee said.