The Fed may be ready to alter course.
If you are feeling a bit confused about the direction of inflation, you’re in good company. Some of the best and brightest economists in the country are having a tough time getting their arms around the current inflation trends.
The most recent Producer Price Index reading came in above economists’ estimates at a record level of 8.3% compared with a year earlier. Producer prices can be an indicator of future price changes at the consumer level.1
One way to gauge inflation is to watch the people responsible for managing inflation – the Federal Reserve’s Board of Governors. In recent weeks, several governors have indicated they are comfortable with how the economy is recovering. So comfortable that they appear ready to slightly change course with monetary policy in the next few months.2
Does that mean inflation will be lower in six to nine months? Time will tell, but keeping an eye on the Fed’s actions may be one of the best ways to see what’s next for prices.
Remember, inflation is just one factor to consider when making adjustments to a portfolio. But if you’re getting uncomfortable, please reach out. We welcome the chance to speak with you if you see higher prices.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
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1. BLS.gov, September 10, 2021
2. FederalReserve.gov, August 18, 2021