Inflation is seen as the stock market’s boogeyman as the economy recovers. We asked 3 experts if the fears are warranted – or if concerns are overblown.

  • Date: 23-May-2021
  • Source: Business Insider
  • Sector:Financial Markets
  • Country:Gulf
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Inflation is seen as the stock market’s boogeyman as the economy recovers. We asked 3 experts if the fears are warranted – or if concerns are overblown.

On April 29, new data showed that a key measure of inflation monitored by the Fed - (personal consumption expenditures) - rose to 3.5% from 1.7% in the first quarter, marking its second-fastest pace of growth since 2011. Then, on May 12, the Bureau of Labor Statistics released new that revealed a 4.2% rise in the all price index before seasonal adjustment. The data confirmed what many market commentators had been suggesting for some time: inflation is rising. The big question is now whether this inflationary period is "transitory" as the , or if it is here to stay. There are experts on both sides of the argument with strong cases. Mohamed El-Erian, the chief economic advisor at Allianz and president of Queen's College, Cambridge, said in an at the beginning of May that he believes inflation isn't transitory as the Fed has claimed. He pointed to rising commodity prices, comments from Warren Buffett on pricing, and rising CPI and core PCE figures as evidence for his claim. On the other hand, Beth Ann Bovino, a chief economist for S&P Global Economics, wrote in a that she believes the recent jump in inflation will be transitory. Bovino said inflation is