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Simply put, their argument leans on a supply and demand balance, public psychology, and the same forces that have continued to keep inflation in check since the late 90s. Looking for more proof? This article highlights the current drivers of inflation, along with the Fed’s assessment of each risk:

📍Base effects – While the consumer price index might have just seen its largest jump in over a decade (4.2 percent), prices now are expected to climb back to “normal” because a year ago they fell dramatically due to the pandemic

📍Fading fiscal stimulus – We’re still seeing the effects of the government’s massive money transfer to households across the U.S., which fueled consumer spending; eventually, that will fade

📍Commodities surge – That spike in consumer spending took manufacturers by surprise, dwindled down inventory and caused prices to rise; however, once the demand is satisfied, prices will ease

📍Labor slack – With the workforce down 4.5 million people, pressure to raise wages and make it up with price hikes is high; but again, normality should return as individuals continue to re-enter the economy

📍Inflation expectations – The Fed has a track record of keeping price increases in the moderate range for the past three decades, which means even when inflation fear does arise, they believe they can tame the fire

Keep calm and retire on: Exercise caution during times of panic and fear-driven headlines. During the Financial Crisis of 2008, I saw far too many investors buy into the chaos and make dramatic financial moves they have yet to recover from. Stay the course, stick to your plan and turn off the Wi-Fi.