Investors have been unnerved by the recent announcement that inflation reached new highs, not seen since before Bush’s administration. The recent CPI number is not what we expected. However, this doesn’t mean the economy will return to its 1970s levels. While I expect inflation to rise more widely through the last year than usual, next year will see a cooling of things as the economy recovers completely from the influenza pandemic. I will talk about the effect I think this will have on the S&P 500 (SPY) and more in this week’s commentary. Read on below….Enjoy this version of my Weekly Commentary, published on November 10, 2021 in the POWR Value newsletter.

If you don’t know what inflation is, then you should. The U.S. saw its inflation rate rise at 6.2% per year, a record for the past three decades. Consumer price index rose at an annual rate of 6.2%, the fastest pace since 1990. It topped 5% in October for the fifth straight month. The CPI increased 0.9% from September to October.

This is a significant increase from the September 0.4% inflation. Supply shortages, strong consumer demand and higher prices have pushed inflation up. Core inflation (which excludes energy and food) rose 4.6% over the previous year.

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