Where's the Inflation From Tariffs? Just Wait, Economists Say.
1. Predictions of a consumer price surge raise concerns about inflation's future impact. 2. Inflationary pressures could affect S&P 500 companies' earnings and valuations.
FAQ
Why Bearish?
Rising inflation expectations typically lead to higher interest rates, which negatively affect equity valuations. Historical instances like the 2018 rate hikes show similar impacts on S&P 500 performance.
How important is it?
Predictions on consumer prices directly affect inflation rates, which correlate with interest rates. The S&P 500’s pricing dynamics are influenced by inflation outlooks and economic forecasts.
Why Short Term?
Inflation expectations usually influence market reactions quickly, affecting investor sentiment and stock prices. Immediate responses in the equities market are common following inflation reports.