Analyst Warns Inflation Could Lead to Meager Returns on Safe Assets

Our nation's inflation problem doesn't appear to be getting any better. Inflation is still a problem, and thanks to government policy, it may remain a problem for longer than many first thought.

A warning from a London-based research firm. An analyst with Capital Economics says the U.S. could be heading into an “era” of high inflation that produces little real returns on safe assets, like bonds. He goes as far as saying the U.S. will have to deal with elevated prices in some form over the next decade.

A crackdown on the energy sector in China, record energy prices in Europe, and cargo pileups at California ports are added reasons why some have projected high prices for the near future.

“If prices go up, ultimately that means consumers spend more money, and that means they might buy less goods and services because they can afford less,” Financial expert and host of the Good Money podcast Derrick Kinney said. “So, it’s this doom loop that’s created that could cost consumers to really feel a pinch over the next several months.”

Kinney says that's a real concern for Main Street and Wall Street, especially as publicly traded companies and analysts are preparing ahead for the upcoming earnings season.

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