The Focus This Week: US Inflation
Take it from the good ole Waffle House: inflation isn’t over. Just last week, the 24/7 breakfast joint added a 50-cent surcharge on all egg orders at its 2,000 locations across the country, blaming cost increases related to the bird flu. It’s not just eggs that are “ruffling feathers” ahead of the next US consumer price report. Inflation is notoriously difficult to predict because of seasonal swings. This time there are also climate disaster effects to factor in. The California wildfires are expected to have caused a considerable jump in new and used car prices – enough to stir an upward move in inflation.
What’s more, there’s a growing sense that even containing inflation at its current, higher levels might become a more difficult battle for the US Federal Reserve. Just last week, the White House set the stage for higher prices across much of what Americans buy – imposing steep new levies on goods coming in from the country’s biggest trading partners. It slapped 25% tariffs on goods from both Mexico and Canada, only to pause them for a month. It also announced a 10% tariff increase on goods from China, which took immediate effect. The threat of an escalating trade war – with all the resulting damage it could inflict on economic growth – has become a major concern for stock and bond investors.
Markets hate uncertainty – and a recent run of government policy announcements, followed by reversals, has made them uncomfortably volatile. But that could be the new way of things: so investors may need to learn to ignore the short-term noise and focus on the long-term outlook.
This document is provided to you for your information and discussion purposes only. It is not a solicitation for business or an offer to buy or sell any security or other financial instrument. Any information including facts, opinions, or quotations, may be condensed or summarised and are expressed as of the date of writing. The information may change without notice and Trusted Novus Bank (“TNB”) is under no obligation to ensure that such updates are brought to your attention. Past performance is not a guide to future performance.
This document has been prepared by TNB from sources TNB believes to be reliable but TNB does not guarantee its accuracy or completeness and does not accept liability for any loss arising from its use. TNB reserves the right to remedy any errors that may be present in this document.
Trusted Novus is registered in Gibraltar under number 3207. Its registered address and principal place of business is: Trusted Novus Bank Limited, 76 Main Street, Gibraltar GX11 1AA. It is regulated by the Gibraltar Financial Services Commission (Permission Number 3207) to provide Banking and Investment Services. TNB is a member of the Gibraltar Deposit Guarantee Board (www.gdgb.gi) and the Gibraltar Investor Compensation Scheme (www.gics.gi).