Inflation Shows No Sign of Slowing

High inflation in the US shows no sign of slowing, especially in the short term. The US Fed understands this, as confirmed in notes released this week from its most recent meeting.

Fed officials are bracing for elevated levels of inflation to remain, before slowing as supply chain bottlenecks and demand imbalances resolve themselves in the first quarter of 2022. 

US central bankers expect inflation to come down over time and are guarded about their immediate plans to tackle it.

The Fed’s dovish comments came as a key measure of US inflation stood at a 30-year high over the 12-month period ended in October, with the Bureau of Economic Analysis reporting that consumer prices (minus food and energy costs) rose 4.1% in the measured period. This is the highest increase in a single year since January 1991. 

What does this mean for me?

With inflation remaining high, and not all central banks in a rush to intervene, analysts are encouraging stock traders to make hay while the sun shines.

Investors can profit from inflationary trends by adjusting their portfolios to include consumer brands that are sure to show an uptick in earnings during the festive season. 

In the US, giants like Coca-Cola and Pepsico will surely benefit from rising consumer prices and increased holiday spending. A similar trend is expected to follow in Europe and other bourses around the world. As an investor in stocks, it pays to watch the share prices of your assets with an eye on the short- to medium-term.