Inflation Views
The Path To 2%
Welcome to Prometheus Asset Allocation. The Prometheus Asset Allocation program offers a stable, macro-focused approach to asset management. Prometheus Asset Allocation aims to outperform a traditional stock and bond portfolio by leveraging our proprietary systematic macro process to rotate between 3 ETFs monthly (plus cash). As part of the program, we will be sharing our views on Growth, Inflation, and Liquidity in addition to our monthly video updates.
Our primary takeaways are as follows:
The latest CPI data disappointed consensus expectations and drove down the three-month trend.
Looking at CPI dynamics, inflationary pressures sequentially increased in the energy and food-related components and declined in the transport-related components.
The constellation of our inflation equilibrium monitors suggests neutral pressures on inflation, with nascent signs of moderation towards the 2% target.
In the context of markets, deteriorating inflationary pressures are supportive for stocks, incrementally more supportive for bonds, and a headwind for commodities.
