Wall Street Increasingly Doubts Fed Can Meet 2% Inflation Target
- Inflation is going to stay high for longer: VanEck, Invesco
- Investors eye real assets, defensive stocks for longer term
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Some bond-market bets are signaling that the inflation rate will fall close to the Federal Reserve’s 2% target in the next year. A growing number of Wall Street asset managers are saying that’s a pipe dream.
Fund provider VanEck sees inflation remaining stuck between 3% to 5% for many years, even if the US falls into a recession. Invesco says the market is overly optimistic that an economic downturn will put a lid on price pressures. Citigroup Inc. says it’s almost impossible for inflation to slow down while wage gains stay high.