4 factors driving inflation and what it means for investors
By Kirsten Hastings, 13 Feb 18
Inflation has been conspicuous in its absence since the financial crisis, in spite of the significant stimulus injected into many of the world’s major economies, according to Robert Lea, head of global equity research at Ashburton Investments.
Weak dollar
“A weaker dollar – if sustained over a period of time – will likely result in higher US inflation,” said Lea.
“A weaker dollar places upwards pressure on commodity prices, as most commodities are priced in US dollars. Dollar weakness will also push up import prices in the US, adding further inflationary pressure to the economy.
“The US economy is particularly susceptible to the second effect, as it is a net importer of goods.”
Tags: Ashburton | Inflation | Investment Strategy
