Inflation isn't trending towards "transitory"
Maybe not "transitory" after all, Chairman Powell? The current score is Inflation 5: Fed 0.
We've been following 1 year and 2 year inflation readings and they aren't very flattering. Both are at multi-year highs and indicate there is some sustainability to higher inflation regardless of the cause (Fed, supply chain, Covid, etc.)
The Fed has 2 mandates: promote low inflation and full employment. Apparently, these are mutually exclusive goals. So, aside from the misery inflation causes the consumer, this topic is important because eventually the Fed will react to high inflation.
That script is well known to all grey-beard participants in the markets and it isn't pretty: no QE, higher interest rates and volatile markets.
Robert Lloyd, CFA®
Chief Investment Officer
Lloyds Intrepid Wealth Management
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