July 16, 2021

MBMG IA Flash – High on an Inflation Panic 🔥

MBMG IA Flash – High on an Inflation Panic 🔥

High on an Inflation Panic🔥 

Data released on July 13th 2021 confirmed the continued acceleration of US Consumer Price Inflation (CPI) through June, which was largely due to increases in used car prices, along with spikes in airfares and hotel and car hire rates due to demand driven by post-COVID ‘re-opening’ of the US economy. 

But is this unwelcome visitor likely to hang around? If not, when will it be gone? This brief snapshot produced by MBMG Investment Advisory tries to explain why it’s impossible to know and so, when people ask us when, we say ‘Quando, quando, quando?’

Quando, quando, quando?
Inflation


It’s impossible to guess when inflation will peak or how that will look. Nobody can know.
But there’s nothing in the data that causes us in any way to re-think the ‘transitory hypothesis’.


Of course, we could guess….. And our models indicate that because inflation has some ‘sticky’ components,it could remain in a range of 3.5% – 4% year-on-year (yoy) until the yearend
(which would really panic markets)


As we have no way to know how accurate that would be, we’ve shown below what any symmetrical


progression back to trend would look like by June 2022 if yoy inflation were to peak in June 2021.

How should you position your assets in the view of MBMG IA experts? 

CONTACT US


MBMG Investment Advisory is licensed by the Securities and Exchange Commission of Thailand as an Investment Advisor under licence number Dor 06-0055-21.

For more information and to speak with our advisor, please contact us at info@mbmg-investment.com or call on +66 2 665 2534.

About the Author:

Paul Gambles is licensed by the SEC as both a Securities Fundamental Investment Analyst and an Investment Planner.

Disclaimers:

1. While every effort has been made to ensure that the information contained herein is correct, MBMG Investment Advisory cannot be held responsible for any errors that may occur. The views of the contributors may not necessarily reflect the house view of MBMG Investment Advisory. Views and opinions expressed herein may change with market conditions and should not be used in isolation.

2. Please ensure you understand the nature of the products, return conditions and risks before making any investment decision.

3. An investment is not a deposit, it carries investment risk. Investors are encouraged to make an investment only when investing in such an asset corresponds with their own objectives and only after they have acknowledge all risks and have been informed that the return may be more or less than the initial sum.


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