“Maybe with wage growth and inflation having peaked, we can get past the peak fears of some sort of wage-price doom-loop,” said Brian Jacobsen, senior investment strategist, Wells Fargo Asset Management. The Fed has been insisting that the higher inflation hitting the economy now will be only temporary, which would give it more leeway to keep its support for the economy in place. If job growth or inflation is stronger and more persistent than expected, though, it could force the Fed to move up its timetable and raise rates more aggressively. “The Fed wants to let the economy run as hot as possible and the let the unemployment rate get as low as possible without triggering hot inflation,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “Inflation may run hot, and that could speed up plans for tapering, but as far as raising rates I think they are still going to wait a long time.”

Source: Daily Sun July 02, 2021 10:07 UTC