US Federal Reserve Chairman Jerome Powell announced that central bank will allow inflation to go higher than 2% for a certain period in August 27, 2020. US market responded as being prepared for long-term inflation: Gold rose and fell; Bond yields fell and rose; stock futures were mostly down while major indexes were higher one day after, August 28, 2020. Since 2008, US has targeted inflation below 2%. (Vigna & Hirtenstein, 2020, August 27). Assuming that US banks will increase interest rate, US bank sector in US stock went up. S&P500’s financial sector rose 1.7%.
Cite as “ Rachel Kim (2020, August 25). Long Inflation Ahead, The Blue Ocean Management.com, retrieved from: https://theblueoceanmanagement.com/2020/08/28/long-inflation-ahead/