Home Guides & Resources chevron_right Economy and the Markets How Long Is ‘Transitory’? Published October 18, 2021 Charlie Toole, CFA, CFP®Director of Portfolio Management This week’s reader question: How long will elevated inflation last? Is transitory still the right way to think about it? To say that this is a hotly debated topic is an understatement. Many analysts and investors view today’s inflation environment as “transitory”—but what that actually means is open to interpretation. Transitory includes a timing component by definition, but is that time frame three months, six months or a lot longer? Wall Street analysts and some Federal Reserve governors are starting to change their tune on inflation, suggesting it could remain higher longer than previously anticipated. For instance, earlier this week Atlanta Fed Chair Raphael Bostic called transitory a “swear word” that he doesn’t like using to describe inflation. He went on to say, “I continue to believe currently elevated inflation is episodic, driven by pandemic conditions such as disruptions in supply chains and labor markets. A major caveat, though, is that the severe and pervasive supply chain issues will probably last longer than most of us initially expected.” As noted above, September CPI rose 5.4% from the same time last year. The good news is that inflation estimates for late 2022 are close to 2%, and they haven’t budged over the last six weeks. Sources: BLS, Bloomberg, Adviser Investments. It’s likely that inflation will normalize late next year. Until then, expect the debate and wordplay to be “severe and pervasive”—anything but transitory. Ask Us a Question!We’re always interested in the topics or concerns you might like us to comment on. Ask us a question about investing, the markets or financial planning and one of Adviser Investments’ experts will answer it in a future edition of The Week in Review. CLICK HERE NOW TO POSE YOUR QUERY. About Adviser Investments Adviser is a full-service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trustsA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process., institutions and foundations since 1994. Adviser Investments and its subsidiaries have over 5,000 clients across the country and over $8 billion in assets under management. Our portfolios encompass actively managed funds, ETFsA type of security which allows investors to indirectly invest in an underlying basket of financial instruments (these may include stocks, bonds, commodities or other types of instruments). Shares in an ETF are publicly traded on an exchange, and the price of an ETF’s shares will fluctuate throughout the trading day (traditional mutual funds trade only once a day). For example, one popular ETF tracks the companies in the S&P 500, so buying a share of the ETF gets an investor exposure to all 500 companies in the index., socially responsible investments and tactical asset allocation strategies, and we’re experts on Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. To see a full list of our awards and recognitions, click here, and for more information, please visit www.adviserinvestments.com or call 800-492-6868. Our statements and opinions are subject to change without notice. Tax, legal and insurance information contained herein is general in nature and is provided for informational purposes only. Always consult a professional regarding your specific situation. Tags: federal reserveheadline inflationinflationWeekly Question