The level of US inflation has been stubborn in recent months. Indeed, January reading not only exceeds estimates, but also boasts the biggest monthly consumer price increase since August 2023.
Jack Ablin, Head of Investment and Founder Partner at Cresset, believes that the price of price encourages investors, and Fed officials, to reconsider their inflation views, especially given the background of tariffs and other trade tensions.
“The Fed stops slaughtering interest rates due to an increase in inflation rates, and concerns about inflation surge related to tariffs can encourage Fed to keep interest rates higher longer-or potentially climbing,” Ablin wrote in his weekly market update notes.
As Ablin sees, investors are worried about the hedge for the surprise of short -term inflation must change to gold.
Indeed, he thinks the prospects of tariffs above the high price level that continuously presents the risk of valid short-term inflation. Therefore, Cresset recommends that investors consider buying gold versus tips to protect their short -term purchasing power.
However, Ablin also said that the long term, “Equity does a better job than almost all other asset classes to stay in front of inflation, allowing investors to maintain their purchasing power from time to time.”
Source: Reuters (Terence Gabriel)
