Bulletin: Understanding the Inflation Puzzle

In this piece, Portfolio Manager Brian Meaney reviews the current inflation picture in the US and how it relates to the economy and a possible Federal Reserve rate hike.

Bulletin Summary

• The US economy has seen positive growth and falling unemployment, but inflation has been quite low.
• Easy monetary policy and falling unemployment have not caused sustained inflationary pressure. As history shows, this is not a new phenomenon.
• Structural changes and global economic forces play some role in persistently low US inflation.
• The conflicting data on jobs and inflation means the Federal Reserve must be pragmatic about raising rates, which they expect to begin later this year.

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