Inflation Concerns?

You may have heard the word “inflation” used more often lately.  Should you be concerned?

As we compare the COVID-related impact on prices from last year to this year, inflation metrics are likely to temporarily surge on a year-over-year basis above the Fed’s target of 2%.  Also rising commodity prices will likely lead to modest upward pressure on pricing as a number of consumer staples companies have indicated that they will raise prices on goods as a result? 

Consider the following:

• Manufacturing boom brings more signs that inflation is building rapidly.
• Retails sales rose in March as consumers use stimulus checks to spend heavily.
• Companies are raising prices to offset higher commodity costs.
• Higher lumber costs impact suppliers, new homes and home repair projects.

But while inflation is likely to tick higher in the near term, Raymond James analysts view this as a transitory issue.  That being said, as a result of pandemic related impacts, the level of uncertainty for inflation forecasts remain high. 

Have more questions?  Call us so we can discuss our thoughts in greater detail.