Let's Talk About Inflation

Let's Talk About Inflation

April 21, 2021

Is higher inflation on the way? This is the question nearly everyone is asking, and this week the LPL Strategists will explain why the answer is likely no, contrary to what so many expect. They will also take a look at April seasonality, along with the recent rough patch we’ve seen in some economic data.


One of the top questions LPL Research receives is about inflation. With record spending, coupled with record monetary and fiscal stimulus, there are many that think massive inflation is coming. The LPL Strategists discuss it is likely we could see as much as a 3% jump in inflation over the coming months, but this will likely be transitory. The factors that held inflation back over the past decade are still in play. Forces like technology, globalization, workforce structure (more robotic automation), and the Amazon effect all should contain inflation in our view.

Stocks seem to love the month of April, with the S&P 500 Index up 14 of the past 15 years during this month. It is one of the best months of the year with most of the gains tending to occur in the early part of the month.

Economic Slowdown?

Pockets of economic data are showing a potential slowdown. The strategists believe it is mostly weather related and not the start of a broader slowdown.. More people are going to restaurants and movies, while millions are being vaccinated each day, signaling the great reopening is alive and well.

You can download all of the graphs for more information here: Inflation Charts

You can watch the full podcast for more information here: Let's Talk About Inflation

Important Dislosures

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth may not develop as predicted and are subject to change.

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All index and market data from FactSet and MarketWatch.

This Research material was prepared by LPL Financial, LLC.

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