Gulf will escape two years of high US inflation: Invesco
The US should be braced for two years of higher inflation as a result of the pandemic, says Invesco, but believes the Gulf region will not face the same upward pressure on the prices of everyday goods.
America’s Labor Department reported that its consumer price index lifted to 5.4% in July from a year earlier, as pent-up demand for travel and restaurants pushed up prices after the easing of lockdown restrictions.
This inflation rate matched the largest jump the US economy had seen since August 2008.
Invesco chief economist John Greenwood disagrees with the US Federal Reserve’s view that this high rate is a “transitory” effect of the opening up of the American economy.
He warns that investors, particularly bond investors, should be wary of maintaining exposure to assets that are vulnerable to inflation at a time when rising prices are likely to erode returns for at least the next two years.
