Inflation concerns remain a pressing issue in the global market, according to Invesco’s global market strategist Brian Levitt. Recent trends indicate a complex scenario, with breakeven rates showing signs of rising.
Levitt notes that short-term inflation is expected due to various factors, including tariffs. However, he believes this type of inflation will be limited in scope. “I don’t think it’s broad-based inflation,” he states. “Tariffs may cause temporary price increases, but they won’t lead to widespread inflation.”
The situation becomes more positive when considering the 10-year breakeven rate, which is currently below 2.5%. This suggests that while interest rates are moving towards their higher end, they still have some room to maneuver.
The Federal Reserve’s actions in 2019, when it lowered interest rates, also play a role in Levitt’s assessment. His insights highlight the importance of clarity amid ongoing policy uncertainty and provide valuable guidance for investors navigating this complex economic landscape.
Source: https://finance.yahoo.com/video/why-near-term-not-broad-223000478.html