Simon’s stock tips
US INFLATION
Rise a concern
S inflation continues to come in higher than expected, even higher than the Federal Reserve expected, according to the latest Federal Open Market Committee minutes. The US data continues to suggest their inflation is transitory – once again the second-hand vehicle market contributed a third to the non-core inflation increase. But that doesn’t mean this rise in inflation is not without risk. The Fed is watching but doing nothing, which by all accounts is the right response. However, if we start to see inflation moving into wages, then it can become structural, and the Fed will fall in behind the curve and will need to increase rates in a hurry. Of note, South Africa’s local inflation slowed, and we have a lower inflation than the US for the first time
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