Prices, Policy and Your Portfolio — Your Inflation Questions Answered

Surprisingly durable price increases are continuing to trouble shoppers and confound policymakers. The Federal Reserve and global central banks have repeatedly lifted benchmark interest rates, roiling markets and underscoring the value of planning for unexpected circumstances.

The highest inflation in a generation has jolted investors, policymakers and markets alike. In 2021, consumer prices, as measured by headline Consumer Price Index, rose 7% year-over-year, the fastest pace since 1982, and significantly higher than the Federal Reserve’s 2% target. This notable increase has sparked concerns around the effect of inflation on investors’ portfolios, wealth plans and ability to fund goals.

While our forecast calls for inflation to moderate, we expect monetary policy to prioritize price stability, and the outlook remains quite uncertain with many “known unknowns:”

• How quickly will supply chains recover?
• Will we see a decline in today’s high energy prices?
• Will upward pressure on wages continue?
• What will be the economic consequences of the Federal Reserve raising interest rates and shrinking its balance sheet?

For investors, the best offense remains a good defense, and it is not too late to revisit your portfolio with an eye toward protection against the impact of inflation.

Download the full report to learn answers to common investor questions on the impact of inflation and how to fortify your portfolio and wealth plan in the face of uncertainty.