<\/p>\n\n\n\n
Higher inflation is the result of a supply and demand imbalance. As the pandemic has calmed in the United States, consumers have emerged eager to spend money \u2013 so eager that consumer spending is about 5.5 standard deviations above average. That\u2019s a lot.<\/p>\n\n\n\n
<\/p>\n\n\n\n
The problem is finding stuff to buy. The Economist<\/em> explained, \u201c\u2026red-hot demand is increasingly met slowly or not at all\u2026Nowhere are shortages more acute than in America, where a boom is under way. Consumer spending is growing by over 10 percent at an annual rate, as people put to work the $2trn-plus of extra savings accumulated in the past year.\u201d<\/p>\n\n\n\n <\/p>\n\n\n\n Shortages are the result of two kinks in the supply hose.<\/p>\n\n\n\n <\/p>\n\n\n\n The first is the supply chain. There is a shortage \u201cof everything from timber to semiconductors,\u201d which are essential to building other products. In addition, shipping containers have become a scarce resource, causing the cost of shipping goods from China to the United States to triple, reported The Economist<\/em>.<\/p>\n\n\n\n <\/p>\n\n\n\n The second is labor. This week\u2019s higher-than-expected inflation data mirrored last week\u2019s lower-than-expected employment data. No one is certain why the employment numbers were lackluster, although theories abound. Regardless, there are limits on what companies can produce when they have too few employees.<\/p>\n\n\n\n <\/p>\n\n\n\n The question is whether supply chains can be straightened so demand for goods and services can be met. If so, higher inflation may prove transitory as the Federal Reserve and some economists anticipate. If not, inflation may stick around. Time will tell.<\/p>\n\n\n\n <\/p>\n\n\n\n (The one-year numbers in the scorecard below remain noteworthy. They reflect the strong recovery of U.S. stocks from last year\u2019s coronavirus downturn to the present day.)<\/p>\n\n\n\n The big news last week was the announcement from the Centers for Disease Control<\/em> (CDC) that fully vaccinated Americans can resume normal activities without wearing masks or social distancing, except where required by law. Suffice it to say, people are ready to return to normal.<\/p>\n\n\n\n <\/p>\n\n\n\n Results from the latest Axios-Ipsos<\/em> Coronavirus survey, conducted in early May, found Americans were feeling more optimistic. Among those surveyed:<\/p>\n\n\n\n If your exuberance about resuming \u201cnormal\u201d life has been tempered by a reluctance to change the routines you\u2019ve adopted during the pandemic, you\u2019re not alone. Medical experts at Northwestern University explained:<\/p>\n\n\n\n \u201cThe emotional impact of this past year may linger with us for longer than we might expect. The key is not to feel forced to snap back into a routine overnight. Give yourself time and understand that your emotional journey back to freely socializing in vaccinated cohorts may look very different from those around you.\u201d<\/p>\n\n\n\n As some people say, \u201cYou do you.\u201d<\/p>\n\n\n\n <\/p>\n\n\n\n \u201cWe must have ideals and try to live up to them, even if we never quite succeed. Life would be a sorry business without them. With them it’s grand and great.\u201d <\/p>\n\n\n\n <\/p>\n\n\n\n Investment advisory services offered through\u00a0Keystone Financial Services, an SEC Registered Investment Advisor. These views are those of Carson Coaching, not the presenting Representative, the Representative\u2019s Broker\/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker\/dealer. Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.\u00a0 However, the value of fund shares is not guaranteed and will fluctuate. Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index. All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client\u2019s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index. The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index. The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. Gold represents the 3:00 p.m. (London time) gold price as reported by the London Bullion Market Association and is expressed in U.S. Dollars per fine troy ounce. The source for gold data is Federal Reserve Bank of St. Louis (FRED),\u00a0https:\/\/fred.stlouisfed.org\/series\/GOLDPMGBD228NLBM. The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998. The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones. The Dow Jones Industrial Average (DJIA), commonly known as \u201cThe Dow,\u201d is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Yahoo! Finance is the source for any reference to the performance of an index between two specific periods. The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Past performance does not guarantee future results. Investing involves risk, including loss of principal. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete. There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. Asset allocation does not ensure a profit or protect against a loss. Consult your financial professional before making any investment decision. Please contact our office if you would like a list of sources used in creating this content.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Uncle Inflation is here. Will he overstay his welcome? Ever since the financial crisis, central banks have pursued expansionary monetary policies to encourage reflation and avoid deflation. Well, it\u2019s taken some time, but inflation is finally here. Last week, major stock indices in the United States moved lower after inflation, as measured by the Consumer […]<\/p>\n","protected":false},"author":14,"featured_media":4501,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"_acf_changed":false,"post_statement":"","post_description":"","post_cta":"","post_button":"Read More","post_button_url":"","compliance_id":"","post_disclaimer":""},"categories":[],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/4496"}],"collection":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article"}],"about":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/types\/oi_article"}],"author":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/comments?post=4496"}],"version-history":[{"count":0,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/oi_article\/4496\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media\/4501"}],"wp:attachment":[{"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/media?parent=4496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/categories?post=4496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.keystonefinancial.com\/wp-json\/wp\/v2\/tags?post=4496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.keystonefinancial.com\/wp-content\/uploads\/2021\/05\/Screen-Shot-2021-05-18-at-8.28.12-AM.png\")
<\/figure>\n\n\n\nConfidence is Returning<\/h3>\n\n\n\n
–-Lucy Maude Montgomery, Author<\/em><\/p>\n\n\n\n