INFLATION!!!

#INFLATION!!!! Well, maybe "Inflation". Here are three ways to look at it:

1. The long term core inflation posted a new high of 3.8%. Let's call it a 30 year high and not great for consumers.

2. On a year over year basis 5.0%. Also not great for consumers.

3. On a year over 2 year basis 2.56%, so maybe this isn't a disaster after all.

Which one do you think is the most important?

My own view is that much of the recent headline inflation is driven by comparisons to pandemic shutdown issues, supply chain shortfalls, and an exodus from the cities to suburbia. Underlying those issues is a continuous rate of baseline inflation that continues to drive up food, housing and wages. Additionally, don’t forget that regulatory and legislative actions on things like work rules, minimum wage, masks, social distancing and benefits (like Obamacare) have also significantly affect the level of costs. It is easy to blame the Fed, but the data on commercial lending growth indicates that the broad money supply is not expanding rapidly.

Robert Lloyds, CFA®

Chief Investment Officer

Lloyds Intrepid Wealth Management

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