After a brief lull in market anxiety, fresh inflation data has scrambled investor expectations again. What once looked like a stable start to the year has given way to renewed concerns about interest rates, corporate earnings, and economic growth. As inflation metrics remain unpredictable, volatility is rising and reshaping winners and losers across asset classes. In this climate, near-term growth is far from assured.

US inflation since 2017

Markets, which at the beginning of the year had begun to adopt a sense of certainty about the economy, suddenly find themselves back in the uncertainty that dominates one of the key macroeconomic themes - inflation. After a series of reassuring data that suggested that price pressures were slowing, new inflation data has again delivered worrying news. While the latest inflation data did not show a dramatic surprise, a deeper look at the structure of the data reveals persistent pressures, particularly in service prices and rents, which continue to…