Inflation has been top of mind for many investors, and Arnerich Massena’s research team has spent some time discussing how inflation might continue to play out over the coming months. In this Research Focus podcast, Senior Research Analyst Arthur Coyne, CFA, and Research Analyst II Ben Larsen, CFA, share a discussion about how inflation is measured and the inputs that are driving the increases, helping listeners come away with a deeper understanding of how we’ve gotten where we are and where we might be headed.

“With just a few exceptions, almost everything we consume is up, year-over-year,” Ben explains. Arthur adds, “Inflation has been rising for more than two years now, and there’s a concern that it is becoming a self-perpetuating phenomenon.” The two discuss the categories included in the Consumer Price Index, and which categories are having the most impact on inflation, as well as strategies that might help mitigate it.

The two take a look at energy as one of the significant drivers of current inflation. “The last six months’ changes in CPI have really been driven by energy, which is the biggest contributor but also the most volatile,” Ben remarks. “Energy is a big wild card,” Arthur adds: “and not only is it a cost to consumers, but also to producers, so those costs are embedded in other areas of the CPI.”

Arthur notes that some inflation is a result of real-world structural problems, like transportation costs, supply chain issues, and the war in Ukraine, meaning monetary strategies have limitations in terms of managing it down. Food prices, in particular, have seen significant increases, largely as a result of these challenges. On the other hand, Ben offers the good news that there are some categories experiencing less inflation, like car prices, services, and wireless internet.

Learn more by watching or listening to the full podcast: click above, or listen on YouTube or Soundcloud.