US: Ingredients necessary for a return to hyperinflation are too few – Charles Schwab

FXStreet reports that according to economists at Charles Schwab, some inflation pressures are already easing; with attendant impact on affected industries’ stocks’ performance.

“At least in the near-term, the surge in economic growth expected for the second quarter serves as an offset to the upward pressure on inflation. In addition, the bloom may already be coming off inflation’s rise if search activity is considered.”

“While CPI increases from one year ago have undoubtedly been strong, the changer over two years disputes the notion that we’re seeing a high and sustained increase in prices. Inflation remains well below levels seen during the Global Financial Crisis, and nowhere near the stratospheric climb in the 1970s.”

“Much of the sell-off in the growth-oriented areas of the market earlier this year was driven by the rise in real rates into March. They have since come down and drifted sideways. That has given the growth trade some more breathing room. Importantly, though, while some cyclical and value-oriented areas have eased their ascent, they haven’t come down meaningfully; confirming the strength in both the prospects for the economy and the continued durability of value factors’ leadership.”