Inflation – U.S. CPI Forecasts With inflation high, the Fed’s interest rate cut decisions require a delicate balance between price stability, economic expansion and employment support. Image: BofA Global Investment Strategy
Contributions to Year-on-Year Headline CPI Inflation The shrinking contributions from shelter and private transportation services are expected to result in a slowdown of U.S. headline CPI inflation, reaching 2.8% by the end of 2024. Image: Goldman Sachs Global Investment Research
U.S. Headline Inflation and U.S. Core PCE inflation According to Goldman Sachs, U.S. PCE inflation is expected to converge to the 2% target by 2025, potentially leading to a more predictable and stable economic environment for U.S. consumers. Image: Goldman Sachs Global Investment Research
U.S. Wages vs. U.S. Inflation Americans are facing real pay cuts due to high inflation, which has been rising faster than wages over the past couple of years. This has significantly eroded the real wages of most American workers. Image: Real Investment Advice
Inflation – PCE Deflator YoY Projections The Fed faces challenges in managing a rate cut amid high inflation, requiring a delicate balance between inflation control, price stability, and economic growth to support employment. Image: BofA Global Investment Strategy
M2 Money Supply and CPI Inflation The significant decline in money supply growth is one of the factors contributing to the contraction of inflation in the United States. Image: Real Investment Advice
What Happens Globally When Inflation Hits 8% Historically, after a spike above 8%, global median inflation tends to be stickier over the following 5 years, causing economic challenges and impacting the purchasing power of individuals and businesses. Image: Deutsche Bank
Inflation Assets and Deflation Assets In order to mitigate inflation risks, should investors increase their allocation to inflation assets and decrease their exposure to deflation assets in their portfolio? Image: BofA Global Investment Strategy
U.S. Equities Adjusted for Inflation When considering U.S. equity returns adjusted for inflation, currently none of the major indices have surpassed their 2021 highs. Image: Morgan Stanley Research
Real GDP and Inflation The U.S. economy has avoided recessions and stagflations 90% of the time, inspiring confidence in investors and showcasing the country’s commitment to long-term economic stability and growth. Image: BofA US Equity & Quant Strategy