A tame outlook for inflation

Central bank policy, consumer spending, commodities markets, the strength of the dollar… Portfolio managers Kelley McKee and Don Padilla discuss these factors and offer their views on where inflation might be headed.

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we believe that inflation over the next 12 months should remain relatively tame but if it moves in any direction we believe it will likely be slightly up right now there are two counteracting forces that are pulling inflation in opposite directions we have the emerging economies that have seen their growth slow especially China and as a result we've seen lower commodity prices and also a stronger Dollar in both of those two things tend to pull inflation lower on the other hand we have the said which has been increasing the money supply through their bond purchase programs and effort to stimulate landing and also economic growth we believe that modest inflation is a good thing because it will likely be a result of a stronger US economy Solutions on the consumer said there's two ways of looking at it one is the impact on the actual consumer which we saw significant inflation back in 2008 and that's kind of slow down gas prices are so low high which is one of the biggest impacts on on consumer spending disposable income one of the issues that occurred recently is more energy cost in general we've had extremely harsh weather through this winter that raised a lot of people's heating bills and that gives them less money to spend at the company level the inflation is really in the input costs of the products on the parallel retail side inflation has been quite buted there was a few years ago were cotton prices went up significantly that had an impact on the margins of the companies but right now the inflation the input Carside is muted the other socks that cover restaurant stocks or seen a little bit more inflation in particular beef and dairy prices have have been going up rather significantly recently that's weather related to mostly to the droughts in California in some foreign countries

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