Verdence Capital Advisors chief investment officer Megan Horneman comes on Catalysts to discuss her inflation outlook following December’s cooler-than-expected Producer Price Index (PPI) data and ahead of tomorrow’s Consumer Price Index (CPI) report.
Horneman characterizes the PPI report as "good data," noting that services and food inflation show signs of moderation. However, she emphasizes that investors should remain "focused on" Wednesday’s CPI release.
"We’re a little concerned that we’re on this kind of upward wave here in inflation," Horneman explains, adding, "You don’t have this perfect spike up and the perfect landing down, and it stays there. You tend to see it move in waves. And what we’re concerned about over the first half of the year is that this refuel of economic growth we’ve seen since the Fed started cutting interest rates… can reignite inflation pressures."
Despite current conditions, Horneman believes the market (^DJI, ^IXIC, ^GSPC) remains overly optimistic, "specifically on that US large-cap growth and technology side of the market." She cautions, "We don’t think it’s pricing in these upside risks to inflation this year."
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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