Recommendation: Prepare yourself for inflation in 2015


Nov. 26 2019, Updated 5:14 p.m. ET

Though the Fed has flooded the US economy with money, Russ explains why inflation isn’t likely to be a problem until 2015 and what investors can do in the meantime to prepare.

One of the positives for the U.S. is the noticeable absence of meaningful inflation.

For many investors who have been watching the Federal Reserve’s increasingly heroic efforts to stimulate the economy, this likely comes as a bit of a surprise.

Market Realist – The graph above shows inflation rates for the U.S. (SPY)(IVV) since October 2009. Inflation has been in the range of 1% to 2% since Q3 of 2012 and it has never breached the Fed’s target of 2% in that period. Inflation as of September 2014 stood at 1.7%.

Although the Fed has been pumping money in the form of quantitative easing (or QE) since the last six years to support the economy, inflation rates have, counterintuitively, remained low. Please read the next few parts of this series, which explain the reasons for this trend.

The withdrawal of quantitative easing could affect global markets (QWLD)(ACWI)—especially emerging markets (EEM)—as easy money comes to an end.

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