US: Easy monetary policy to support further upside for equities – UBS
|US inflation remains at its highest level since 2008, while core price increases are also well above the Fed’s 2% target. But the details of the consumer price release suggested that the inflation spike will prove transitory. Economists at UBS expect the Federal Reserve to look through the recent inflation figures, and accommodative policy to continue to support equity markets.
US inflation data suggests the Fed doesn’t need to act
“The detail of the report supports the view that inflation is contained and likely to fall in the months ahead. So we see the data as consistent with the Federal Reserve’s view that price pressures will start to fade and do not justify an early withdrawal of monetary stimulus.”
“Alongside solid growth and the rapid recovery in corporate earnings, we see continued easy monetary policy as helping support further upside for equities.”
“We think that cyclical and value sectors will be particular beneficiaries, and we continue to advise investors to position for reopening and recovery.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.