It is the mainstream financial media narrative du jour. After years of relatively benign pricing pressures during the post crisis period, we are now entering a phase of sustainably higher inflation. This notion has raised the specter that the U.S. Federal Reserve will need to raise interest rates more quickly than expected, has sent U.S. Treasury yields higher, and has shaken the U.S. stock market to the core over the past two weeks. But while the narrative certainly makes good sense, a key question remains critically important to ask. Are we really seeing any signs of the rise in inflation that so many have already assumed as given? And what does the true answer to this question mean for our stock and bond allocations?
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