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Fixed income
Active fixed income investments uncover yield and value opportunities while mitigating risk. Tap into Natixis Investment Managers’ expertise.
September 18, 2024
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Macro views

US Inflation Tracker

August 29, 2024 - 4 min read

The US Inflation Tracker captures the trends that provide context in today’s economy.

While inflation may still feel high to many consumers, July’s Consumer Price Index (CPI) data shows inflation is returning to the 2% level – right where the US Federal Reserve prefers it to be.
 

Core inflation (ex-shelter) tracking around 2%

When excluding shelter, and its accompanying lagged effects, from core consumer price inflation, we see that the year-over-year core consumer prices have basically settled right around a 2% level for some time. To be more precise – 13 months and counting.


Core Consumer Price Inflation ex-Shelter (9/30/14–7/31/24)
Core Consumer Price Inflation ex-Shelter (9/30/14–7/31/24) Source: Natixis Investment Managers Solutions, Bloomberg

Downshift in motor vehicle insurance costs?

Motor vehicle insurance has been a thorn in the side of inflation for some time. The April inflation print marked the high point in motor vehicle insurance, with premiums rising almost 23% on a year-on-year basis. This single line item alone has been accounting for more than 50% of the monthly increase in inflation, in select months. As we’ve highlighted before, motor vehicle insurance is a function of vehicle prices and repair costs. The surge in insurance prices was a function of the lagged catch-up in premiums to the rise in new and used vehicle prices, parts, and repair costs over the past four post-Covid years.

We believe that catch-up has finally played out – as there’s been a steady drop in the past three inflation reports. What was once a major headwind has now flipped and looks set to continue to normalize. This means a steady reduction in that year-on-year number, adding to the disinflationary trend that looks to be gaining momentum.
 

Motor vehicle insurance–related Consumer Price Inflation (1/13/19–7/3124)
Motor vehicle insurance–related Consumer Price Inflation (1/13/19-7/3124) Source: Natixis Investment Managers Solutions, Bloomberg.

Resource

US Inflation Tracker – August 2024

This in-depth chart deck highlights historical data related to:

  • Personal consumption
  • Inflation surprises
  • Goods and services
  • Base effects and surges
  • Supply chain, shipping, and restocking
  • Housing market pressures
  • Wage pressures
  • Inflation expectations

Investment ideas

Consider these funds that may help stand up to inflation:

Learn more

Curious to learn how the fixed income markets are evolving?

This material is provided for informational purposes only and should not be construed as investment advice. The views and opinions contained herein reflect the subjective judgments and assumptions of the authors only and do not necessarily reflect the views of Natixis Investment Managers or any of its affiliates. The views and opinions expressed are as of August 29, 2024, and may change based on market and other conditions. There can be no assurance that developments will transpire as forecasted, and actual results may vary.

All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income, and alternative investments. There is no assurance that any investment will meet its performance objectives or that losses will be avoided. Investors should fully understand the risks associated with any investment prior to investing.

CFA® and Chartered Financial Analyst® are registered trademarks owned by the CFA Institute.
 

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