Market Insights: Inflation Watch
Overview
Despite extraordinary measures by global central banks to re-inflate economies, inflation has remained tame. The reasons for subdued inflation have been deleveraging, excess capacity and high unemployment levels.
The author believes that:
- These factors are unlikely to provide the same anti-inflationary pressures going forward and the Federal Reserve will continue to normalize monetary policy as an offset.
- Investors should be on inflation watch, scrutinizing investment portfolios and reducing exposure to poorly compensated risks.