BY: MARSHALL BARTLETT
Senior Vice President / Portfolio Manager
Announced this morning, the Consumer Price Index (CPI) increased 0.4% in August and has increased 1.3% on an annual basis, both slightly more than expected. Used Cars & Trucks saw large price increases during the month given they were in strong demand. The core rate, which excludes prices for food and energy, increased 0.4% in August and has increased 1.7% on an annual basis, also more than expected. Overall, despite higher readings in August, inflationary pressures remain benign even with high levels of monetary and fiscal stimulus provided earlier this year. Inflation may continue to grind higher but is not likely to
become problematic until economic activity and consumer spending further improve following the COVID-19 pandemic. The Federal Reserve recently announced a change in their policy, allowing for “an average” of near 2% for core rates, rather than using this level as a maximum. Thus, they are comfortable with keeping accommodation in place for a while even if core prices move above this level at some point in the future. In all, bond yields ticked lower and equity futures are higher as we head into the market open.
This material is intended to be for informational purposes only and is intended for current or prospective clients of Argent Trust Company. This information is obtained from sources believed to be reliable, and its accuracy and completeness are not guaranteed. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circumstances of each investor. Forward‐looking assumptions are Argent Trust Company’s current estimates or expectations of future events or future results based on proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information. Investments can go down as well as up. Past performance is not a reliable indicator of future results.