Weekly Strategy Perspectives: Great (Inflation) Expectations – Part I

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”
– Ronald Reagan

The Through Line: Last week’s toasty reads on U.S. consumer and business inflation nudged both bond yields and investor anxiety higher. Many market watchers were surprised it hadn’t happened sooner, given the ongoing energy shock of the past few months on top of persistent cost stickiness created by last year’s shifts in tariffs, trade, and immigration policy. Inflation and interest rates (bond yields) are closely related. However, there are important nuances in what influences each – and how they interact with each other. This week, we do a deep dive into inflation. Next week, we will delve more thoroughly into fixed income markets and how they are absorbing increased supply and shifting fundamentals.

To read the full report, click here.

BMO Private Wealth is a brand name for a business group consisting of Bank of Montreal and certain of its affiliates in providing private wealth management products and services. Not all products and services are offered by all legal entities within BMO Private Wealth. Banking services are offered through Bank of Montreal. Investment management, wealth planning, tax planning, philanthropy planning services are offered through BMO Nesbitt Burns Inc. and BMO Private Investment Counsel Inc. If you are already a client of BMO Nesbitt Burns Inc., please contact your Investment Advisor for more information. Estate, trust, and custodial services are offered through BMO Trust Company. BMO Private Wealth legal entities do not offer tax advice. BMO Trust Company and BMO Bank of Montreal are Members of CDIC.

^® Registered trademark of Bank of Montreal, used under license.