Is Runaway Inflation Headed Our Way?

With the Fed keeping rates near zero for the foreseeable future and trillions of dollars of stimulus payments floating through the economy, is the inflation hammer about to fall? Vice President Charlie Toole spoke about where inflation may be headed in our recent webinar,* Inflation, Inoculation and Infrastructure: Defining the New Normal.

Please enjoy the excerpt below and click here for the full webinar replay to hear more. 

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Charlie Toole:

We’re about to enter a period of higher inflation in the next few months—inflation’s going to be running toward 3.5%, the highest value [for headline inflation] since late 2011. But we would add that as with most pandemic-impacted data, be it earnings, economic data, or inflation, it’s helpful to look not only at the year-over-year comparison but also the recent data versus pre-pandemic figures.

If I look at expected inflation data over the next few months and compare it to where we were in December 2019, the inflation readings come down by about 1%. So, we do have inflation, and it is running a little bit higher than it has in the last 10 years, but the numbers are, pardon the pun, being inflated by the year-over-year comparisons. I think we would need to see the job market improve and move toward full employment before we would start to see sustained inflation.

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Click here for a replay of Inflation, Inoculation and Infrastructure: Defining the New Normal. Please contact us at (800) 492-6868 to learn more about comprehensive wealth management solutions.