Inflation Fighters Stand Ready!
As investors flounder between growth stocks, trade, and this week’s earnings circus, economic star signs are aligning for a different group; consumers. Shoppers have never been more confident, throwing money at their creature comforts like there’s no tomorrow!
Inflation? Who cares about that? Employment? Isn’t everyone employed? Our retirement funds? Well up. For a limited time only, customers can spend against a backdrop of very fine fiscal figures. Data released yesterday by the US Commerce Department suggested Americans had increased their luxury buying this month, a reassuring insight for the rest of a market hoping to avoid any interest rate u-turns this week.
With the Federal Reserve poised to lower rates, economists are convinced that would firm up inflation once more at its 2% target. Inflation is the invisible tax that eats away at our money. If our gains can’t outpace it, it pickpockets our purchasing power and leaves us down over time. There’s no stopping it, so Fed Chair Jerome Powell is entrusted with at least keeping it under control! He’s got a powwow today with colleagues who will be sure that cutting rates is the right move at the right time.
If the plan works, expect investors to make an immediate splash in the markets as they search for inflation buoyancy. Inflation-fighters can be found out there to anchor a portfolio down from the invisible tax. Think commodities when other factors are equal, hard assets like real estate, and even certain stocks that enjoy the pricing power to keep prices level with inflation!
Jerome Powell will put his thoughts on the table today with colleagues. Consumers? Enjoy the economic conditions while they last, his call tomorrow could trigger a mass investor migration!