20 Sep 2021
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
You can see from the chart above that the forecast jump in inflation has presented in the United States, Germany, Japan and Australia.
The question is whether the jump in inflation is permanent or temporary?
Our view is that it is temporary and likely to reverse as goods supply increases due to a post COVID-19 global recovery.
For example, if we take a closer look at Australia, the current jump in headline inflation has still failing to lift core inflation up into the RBA target range.
Click for chart.
Why is inflation so important because large fast moving increases in inflation destroy asset prices and that is bad news for investment portfolios.
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