Inflation figures set to be released indicate that the consumer price index (CPI) may rise to a 4.2% annual rate, marking the first time it has exceeded 4% since May 2023. This increase is largely attributed to surging energy prices linked to geopolitical tensions, particularly the ongoing conflict in the Middle East.
Core inflation, which excludes food and energy, is also expected to rise to 2.9%. Liz Ann Sonders, chief investment strategist at Charles Schwab, emphasized that the inflation issue is broader than just energy prices, suggesting that it is influenced by money supply and technological factors, particularly related to AI.
She cautioned that even if the conflict were to resolve quickly, it is unlikely that oil prices would return to previous lows due to significant disruptions in production. This situation has led to increased investor anxiety, as any inflation data that exceeds expectations could negatively impact equity markets