SEVERE WX : Fire Weather Watch View Alerts

Why investors shouldn't lose sleep over inflation

Inflation is ...

Posted: Nov 19, 2018 9:18 PM
Updated: Nov 19, 2018 9:18 PM

Inflation is bad news for investors. It means people shop less, corporate profits are pinched and stocks are less valuable. High inflation increases the likelihood that the Federal Reserve will raise interest rates more quickly.

When inflation rose faster than expected in January, stocks fell in a tailspin.

Banking, finance and investments

Business, economy and trade

Economic conditions

Economic indicators

Economy and economic indicators

Financial markets and investing

Inflation

But inflation is under control for now. And there's reason to believe it will remain relatively low throughout next year, said David Kelly, Chief Global Strategist for JPMorgan Funds.

Wages have been ticking up. But because productivity has also been rising, inflation should remain steady, he explained.

"Stronger wage growth did not boost consumer inflation in the third quarter and probably won't do in the quarters ahead," barring dramatic changes in wage growth or productivity, Kelly noted in a recent LinkedIn post.

Falling oil prices also mean that oil, "a traditional villain in boosting US inflation," is unlikely to contribute to inflation in the year ahead, Kelly said.

Even the trade war is unlikely to boost inflation, he said. The trade war has made more than $250 billion of Chinese exports more expensive for Americans. But, Kelly noted, "an escalation of a trade war with China would also have strong deflationary impacts by slowing the global economy and likely boosting the dollar."

Kelly will join CNN anchor and correspondent Paul Newton on "Markets Now" on Tuesday to further discuss inflation and offer insight into what's happening on Wall Street.

"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. This week, the show will stream on Tuesday instead of Wednesday. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.

You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 302484

Reported Deaths: 6859
CountyConfirmedDeaths
Los Angeles1249923690
Riverside23334533
Orange21517402
San Diego18402415
San Bernardino17414304
Imperial7654127
Fresno762787
Alameda7407146
San Joaquin606567
Kern597989
Santa Clara5678166
Tulare5509148
Sacramento493278
Stanislaus436450
Contra Costa435788
San Francisco414550
Ventura409353
Santa Barbara386829
San Mateo3787111
Marin322730
Kings285539
Monterey234317
Solano198527
Merced179312
Sonoma151914
Placer99311
San Luis Obispo8774
Madera8578
Yolo80228
Santa Cruz5063
Napa4664
Sutter3374
Butte3194
San Benito3112
El Dorado2920
Lassen2690
Shasta1766
Yuba1633
Humboldt1614
Glenn1590
Nevada1591
Mendocino1070
Colusa1030
Lake1011
Tehama981
Calaveras610
Tuolumne600
Del Norte580
Mono491
Amador360
Inyo341
Siskiyou330
Mariposa311
Plumas150
Alpine20
Trinity20
Sierra10
Unassigned00
Chico
Few Clouds
81° wxIcon
Hi: 102° Lo: 66°
Feels Like: 81°
Oroville
Clear
80° wxIcon
Hi: 102° Lo: 66°
Feels Like: 80°
Paradise
Few Clouds
81° wxIcon
Hi: 95° Lo: 68°
Feels Like: 81°
Chester
Clear
64° wxIcon
Hi: 86° Lo: 52°
Feels Like: 64°
Red Bluff
Clear
83° wxIcon
Hi: 104° Lo: 67°
Feels Like: 83°
Willows
Few Clouds
81° wxIcon
Hi: 105° Lo: 61°
Feels Like: 81°
Slightly hotter temperatures are ahead for your Friday and we'll continue to get even hotter through the middle of next week.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events