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Vanguard’s market forecasts for 2020 and beyond? Higher, but not as juicy as the 2010 decade.

December 31, 2019 - by Erin Arvedlund

Inflation

Retirees and other investors feel they’re paying more for everyday items, especially health care and tuition, even though the Federal Reserve claims inflation is hovering around 2% annually.

Jim Bianco, of Bianco Research, wrote on Nov. 29: “The Fed instituted its inflation target in January 2012, targeting a year-over-year [rate] at 2%. The Fed can contort themselves all they want but they have not been successful in hitting this target. Looking forward, inflation expectations suggest the Fed will struggle to hit their 2% goal.”

Bond investor David Kotok of Cumberland Advisors said measures of inflation he tracks mostly confirm that view, although there are indications that a little more inflation could be forthcoming in 2020.

“We think some more inflation could show up in 2020 if we didn’t have the Trump trade war dynamics interfering with economic cycles. Instead, we have sluggish capital expenditures as business agents defer decisions because of high and rising Trump uncertainties,” Kotok said.

Read the full article at: The Philadelphia Inquirer

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