Nearly 8% headline inflation has forced the Fed to react. Given the delayed effect of rate hikes – along with still very low levels – the point at which tighter policy begins to constrict growth is likely some ways off. Yet the tempering effects of demand destruction likely remain relatively farther on the horizon as well. An unprecedentedly level of consumer savings will likely enable households to tolerate a relatively extended period of higher prices. The question is how long will this stand. Supply disruptions, wage pressures, fiscal largesse and commodities upheaval have all contributed to the inflationary backdrop. Corralling these forces stands to be tall task and investors should be prepared for how a sustained period of elevated prices will reverberate through equity markets.




Consumer Price Index (CPI) is an unmanaged index representing the rate of inflation of the U.S. consumer prices as determined by the U.S. Department of Labor Statistics.
Basis point (bp) equals 1/100 of a percentage point. 1 bp = 0.01%, 100 bps = 1%.
West Texas Intermediate (WTI) crude oil is a specific grade of crude oil and one of the main three benchmarks in oil pricing.
S&P 500® Index reflects U.S. large-cap equity performance and represents broad U.S. equity market performance.
Price-to-Earnings (P/E) Ratio measures share price compared to earnings per share for a stock or stocks in a portfolio.