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Inflation spiked more than expected in March, and is expected to go higher in the months ahead.
The Federal Reserve says they will look past the surge, which they say will be temporary.
We asked 5 financial experts how much of a threat to markets they see inflation being this year.
For the first time in years, investors face a credible threat of meaningful levels of inflation.
A temporary surge in inflation is expected to happen this year as spiking demand outpaces supply shortages. The
Stocks dropped from a record as traders assessed corporate earnings, economic data showing potential inflation pressures and hawkish remarks from a Federal Reserve official. The dollar climbed.
The S&P 500 trimmed its biggest monthly advance since November, with energy and technology shares leading losses on Friday. Twitter Inc. sank as the social media company posted a sluggish start to the year in its advertising business. Despite living up to Wall Streetâs profit expectations, Chevron Corp. slid after disappointing investors who were anticipating a revival of buybacks.
Signs of excess risk taking in markets show itâs time to start debating a reduction in bond purchases, said Robert Kaplan, president of the Dallas Fed, breaking ranks with Chairman Jerome Powell. Data showed personal incomes soared in March by the most in monthly records back to 1946, powered by fiscal stimulus. A key measure of consumer prices that the Fed officially uses for its target had the biggest
Stocks dropped from a record as traders assessed corporate earnings, economic data showing potential inflation pressures and hawkish remarks from a Federal Reserve official. The dollar climbed.
The S&P 500 trimmed its biggest monthly advance since November, with energy and technology shares leading losses on Friday. Twitter Inc. sank as the social media company posted a sluggish start to the year in its advertising business. Despite living up to Wall Streetâs profit expectations, Chevron Corp. slid after disappointing investors who were anticipating a revival of buybacks.
Signs of excess risk taking in markets show itâs time to start debating a reduction in bond purchases, said Robert Kaplan, president of the Dallas Fed, breaking ranks with Chairman Jerome Powell. Data showed personal incomes soared in March by the most in monthly records back to 1946, powered by fiscal stimulus. A key measure of consumer prices that the Fed officially uses for its target had the biggest
U.S. Technology Stocks Stand to Benefit From Ties to TIPS
Technology stocks are poised to gain support from relatively stable yields for U.S. inflation-indexed debt, according to Andrew Garthwaite, a global strategist at Credit Auisse Group AG. He compared a relative-strength gauge for the group with the tied on10-year Treasury Inflation Protected Securities, or TIPS, in a report Thursday. The S&P 500 Information Technology Index’s ratio to the benchmark gauge of U.S. equities set this year’s low in March, and then climbed as demand for the debt caused yields to fall. “We do not expect a meaningful rise in the TIPS yield,” Garthwaite wrote, citing U.S. monetary policy and other influences.
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Mark Twain once quipped, “Everyone complains about the weather, but no one ever does anything about it.”
Well, these days everyone probably would complain about inflation if it ever reappeared in a major way, but the Fed promises it won’t do anything about it until employment is on track toward whatever “normal” was before the pandemic.
As Wall Street analysts expected, the Fed didn’t change rates or make any other policy changes coming out of this week’s Federal Open Market Committee (FOMC) meeting that ended this afternoon. Rates stayed near zero, where they’ve been for over a year, and the Fed remains committed to its $120 billion a month bond-buying program designed to keep borrowing costs low and refuel the economy coming out of the pandemic.