Brett Arends’s ROI: The good news on inflation that everybody missed

by | Jul 20, 2022 | Stock Market

Retirees, senior citizens and “widow and orphan” investors got some good news from Wall Street on Tuesday. But don’t worry if you missed it, because everyone else did too. The news was a double whammy. The first was that inflation expectations remain far lower than the ever-popular worst-case scenario. The second was that, in case these lower expectations turn out to be wrong, insurance against higher inflation is reasonably cheap.

This news came courtesy of one of the most important reports of the month, the Bank of America Securities’ global fund manager survey. Every month the bank’s strategists poll major money managers around America and overseas to find out what they’re thinking and how they are currently invested. This month, the bank asked over 250 pension fund managers and chief investment officers, who are collectively handling over $700 billion in assets. “Everyone… expects inflation to fall,” wrote the bank’s strategy team, headed by Michael Hartnett. Those expecting inflation to fall greatly outnumbered those expecting anything else. The consensus on lower inflation, the bank said, is the strongest since the global financial crisis of 2008 that followed the collapse of Lehman Brothers.  Money managers also expect a plunge in economic growth and a recession — either now or pretty soon. (Real-time economic data tracked by the Atlanta Federal Reserve says we are already in a …

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