JRE - Sticky Inflation: The Tactical And Strategic Importance Of Real Assets

2024-05-04 02:45:00 ET

Summary

• As inflation proves stickier than anticipated, the role of real assets in a diversified portfolio becomes increasingly important for inflation mitigation.
• Quarterly annualized U.S. core PCE inflation rose from 1.5% in Q4 to 4.4% in Q1, reinforcing the notion that a smooth return to a low inflation regime is unlikely.
• While the current stickiness of inflation is at least partially due to the cyclical strength of the U.S. economy, several sizable secular macroeconomic trends, such as deglobalization and rising commodity costs, suggest that the economy may be shifting to a more inflationary paradigm.

By Marc Dummer, Client Portfolio Manager | Mike Reidy, Director, Client Portfolio Manager ...

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