Inflation rises at fastest rate in nearly 40 years – Experts weigh in

Inflation rose last month in fastest speed since 1982. The consumer price index rose 6.8% in November, hotter than expected.

Here’s what five experts say about inflation, its impact on Federal Reserve and what it says about the US economy.

Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, said Friday’s market reaction allows the central bank to continue raising interest rates.

“It was partially expected and that’s why you’re seeing especially the long end of the bond curve starting to do well in terms of falling yields and rising prices. You know, really, this is the kind of market that’s giving the Fed the green light to start raising rates and what they’re telling the Fed is basically you’re on track to fall a little faster and at least slow down. think about raising rates because the long end of the curve is probably the part that’s most sensitive to inflation expectations.”

Keith Lerner, co-chief investment officer at Truist Advisory Services, said investors may be pricing in more rate hikes than they are likely to.

Pedestrians carry Macy’s shopping bags in San Francisco, California, on Thursday, September 16, 2021.

David Paul Morris | Bloomberg | beautiful pictures

“All markets move towards expectations and this comes in against expectations. And there are some numbers that whisper that could be even worse. I think that’s why the market has so far been a bit off. OK response To the more direct question of the Fed, this certainly allows them to move forward with further acceleration.However, I would say, right now the market is starting to price in. in three rate hikes we think that’s too strong, especially when you look at the 10-year term under 1.50% If they want to maintain any kind of yield curve, I think they’ll go at a more cautious pace.”

Jim Cramer, host of CNBC’s “Mad Money,” believes in the Fed’s progress.

“You go back in 1982 and that’s the time when the Fed was just coming out of a terrible rate cycle. Now, you know, these comparisons make me very cold. What’s really important is that we’re here. got rid of the word transitory. that is, I think [Fed Chair Jay Powell] correctly predicted this. But if you’re on conference calls, you know that a lot of them are just Covid related. So I think he’ll get it right again. “

Dan Niles, founder and portfolio manager at Satori Fund, offers his expectations for monetary policy moves in the coming year.

“This really removes any possibility for the Fed to slow down on this and they’re going to have to fall faster than people predict and I’ve been saying for a while that there’s going to be a lot of rate hikes in the near future. next year and that’s still my belief.”

Cecilia Rouse, chair of the Council of Economic Advisers, offers her economic outlook.

“If we look at the economy as a whole, we know that our unemployment rate has come down. The recovery continues to heal into 2022. And so I think inflation should come down. Obviously, that will depend on a few things, but we’re working hard to ease supply chain challenges. , we’re working hard to resolve any What bottlenecks can we see, but importantly, we believe that when we get to the other side of this pandemic, it’s clear that the virus is under control, but as we work hard to put the vaccine in our arms, as we vaccinate the rest of the world, economies around the world will heal and we should see inflationary pressures ease.”

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