Inflation Series: Part 6 Consumer expectations of inflation are rising

Luckily for the Fed, consumer expectations for inflation are nowhere near the headline CPI numbers. That's the good news. The bad news is that inflation expectations are the highest in years and MAY be on a long-term upward slope. We won't know for sure until we get to the other side of 2023's recession.

You see, inflation tends to fall in recessions. While the long-term trend in inflation might be higher, for the next few quarters it is likely to ease as growth slows down. This will raise many hopes that the pop in inflation is temporary and that we can get back to the low-growth-low-interest-rate environment of the 2000s and 2010s. It is too early to tell at this point.

In general, higher expectations of inflation will lead to the realization of higher inflation.

If you'd like to discuss how to manage your portfolio through this environment, please reach out to us at info@lloydsintrepid.com.

Robert Lloyd, CFA®

Chief Investment Officer

Lloyds Intrepid Wealth Management

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