US inflation at highest level in 13 years running at +5.4%yy for second month, Core inflation (excl energy) +4.3%yy (Jul) from +4.5% (Jun).
With a slight moderation in core inflation, economists are calling this as the inflation "peak".
Whilst this may represent "peak inflation" year over year, overall inflation levels will remain elevated on restart and supply chain constraints
As explored in our recent article on “catch-up” rates, we believe Fed policy will remain accommodative, with interest rates "lower for longer", as it lets inflation run "hotter for longer". This is positive for risk assets that offer inflation protection
In inflationary regime we favour value-bias equities and real assets for diversification.