Long-standing market bull, he is tempering his view due to inflation.

Phil Orlando of Federated Hermes believes that the Federal Reserve would raise interest rates six-fold over the next 2 years in order to curb massive price increases, from shelter to food and cars to housing.

CNBC’s Chief Equity Strategist for the Firm stated that “our best guess” is that there will be two quarter-point rate increases from the Fed in next year’s second half, as well as possibly four additional quarter-point rate hikes during calendar ’23.Trading Nation” Wednesday.

Orlando has assets of $634 billion and is worried about recent inflation figures. CPI and personal consumption are both important. are accelerating at their fast paces in three decades.

Last week, the Commerce Department published prices for personal consumption expenses or Core PCE increased 4.1% in October from a year ago. Fed’s inflation gauge is the most trusted. It does not include energy and food.

The consumer price index or CPIIn October, the index also jumped quickly. In order to track the price consumers pay for goods and services, Labor Department has an index that includes energy.

“Given our recent surge in inflation, it wouldn’t surprise me honestly if the Fed increased that pace for tapering,” he stated. “Once tapering has ended, we would expect some rate increases.”

According to Orlando, this could be what takes Wall Street off guard.

“The Fed, I believe to some extent, has played a positive game alongside the Biden administration when it came to the topic of the temporary or transitory of inflation“He said.

Orlando is convinced that the Fed understands Orlando the problem’s magnitude. He points to the decision begin tapering this month.

“They are going to take out accommodation at an acceptable pace over the next 2 years in order to try and get inflation under control, to see how they can put the magic back into the bottle,” said he.

Orlando especially likes stock options in a market with rising rates. energy, materialsAnd industrialsThey can recoup increasing business costs and raise prices, thereby increasing space.

Orlando stated, “What we are doing is trying to put money in companies that can navigate this situation in reasonably good shape.”

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