For the first time in a long time, concerns about inflation are intensifying as the economy strengthens. Even rate changes could be on the table as former Federal Reserve chair and current Treasury Secretary Janet Yellen said that interest rates might need to rise.
As Bank of America pointed out in a recent research note, mentions of inflation on earnings calls are up 800% year over year. Higher prices of raw materials is pushing up the cost of food at the grocery store too.
This level of change may be unfamiliar to some investors.
"If you think about the past 10, 15, 20 years, most of the talk about potential falling markets has been because of too little growth, right, or a more deflationary type environment," Brent Schutte, Northwestern Mutual Wealth Management Company’s chief investment strategist, told Yahoo Finance Live. "Now I think the other side of the distribution is in play. The big question over the coming quarters is, do we get too much growth? Do we get too much inflation?"
According to Schutte, investors need to hedge for inflation, again, potentially for the first time in decades.