Premium Investment Service (May 2024)

Inflation Update & Portfolio Review

It seems the big ‘wrong’ for many in 2023 was calling a global recession – it didn’t happen. It may be the big ‘wrong’ in 2024 will be calling for rate cuts – they might not happen either. It all hinges on the ‘stickiness’ of inflation. The good news is that in forecasting inflation, we have some form. In September 2022 – when everybody thought the world was going to be stuck with double-digit inflation – we put together a paper outlining our view that inflation was about to peak and then fall rapidly. Then, in May last year, we provided an update to our inflation forecasts outlining that inflation was going to continue its downward trend but then get stuck in the 3-4% range thanks to high services inflation.

 

 

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