Taymour Tamaddon July 27, 2021 08:59
Optimism surrounding the nascent U.S. economic recovery following one of the deepest downturns in history has been tempered in recent months by a sharp rise in inflation. Annual consumer price index (CPI) inflation in the U.S. soared to 5.4% in June well above the Federal Reserve’s 2% target raising concerns that earlier-than-anticipated policy action might be necessary. This prospect has prompted a rise in equity market volatility, with growth-oriented stocks coming under particular pressure. However, we do not anticipate inflation moving to a consistently higher level over the longer term. As such, we maintain a positive longer-term outlook for growth companies and their ability to grow free cashflows over time.