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Macro Insights: Under Pressure: Is Inflation Back?

June 2018

Executive Summary

This month we check the barometer on inflation. In our latest quarterly outlooks, we noted the global growth upswing is strong and synchronized, but inflation trends are still dispersed. Inflationary forces are gathering in the US, while in Europe and Japan the pressure is on policymakers, as prices have barely responded to heavy stimulus.

Moreover, recent data have raised fresh doubts about the outlook, and further complications for investors in the markets most exposed to global price pressures.

We consulted specialists across the GSAM investment platform on the range of factors driving inflation, from the temporary glitches that may be clouding the near-term outlook, to the secular drivers that should prevail in the longer term. On balance, we believe a gradual normalization of global price pressures is under way, but the process will remain uneven for the foreseeable future.

Source: Bloomberg, as of May 2017

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