What do you consider the pressures that may cause inflation to be less than 4% by EOY 2026, and/or what has been keeping inflation under 3% as reported now?
What kept it below 3%:
- Oil price cratered due to global supply glut
- Energy prices were low in US
- Massive increase in goods inventories pre-April 2025 tarrifs*
I have been looking at why we have seen such large lags in inflation increases due to the tariffs, and historically there was always some increase in inventories pre-tariffs (when a specific sector was targeted) but what happened in April was unprecedented (it was so big it distorted the GDP numbers).
So post-April, what we have seen is an unwinding of those large goods inventories while tariffs were applied. This kept inflation down because businesses could still maintain some of their profit margins while absorbing some of the tariff costs.
Now that those excessive inventories have been run down (8 months later) we are seeing larger price rises as input costs have rise accordingly. Businesses are putting up their prices as they cannot afford to absorb the extra tariff costs.
What could drive the 4%?
- Oil prices are now rising due to ME conflicts
- Commodity prices are materially increasing (this then feeds into the price of manufactured goods)
- Pass-through inflation due to tariffs coming through
- Energy costs in the US are materially rising
- Services inflation is also rising quickly due to higher labour costs
What might mitigate that 4% down?
- Higher oil output from OPEC (prices would stay low even with ME conflicts)
- Government spending in the US is materially curtailed (healthcare, pensions) which could also work to reduce inflation.
- Energy costs stabilise (or fall) due to more capacity coming in.
- Housing costs attenuate
Every now and then a post reminds me not everyone is engaging with this forum on thier phone and typing with one finger like me….
I hate typing with one finger enough that I typically even use my computer to text my girlfriend
I think a poll would be interesting. “What percentage of your posting is from a phone?” And have 10% increments. I think mine would be about 20%. They are short posts and have at least one typo that I eventually fix from my PC.
I always use a phone its just that I have a very big screen (Samsung S25 Ultra) so its very easy to type.
you never adopted swype?
1 Like
100% from phone.
1 Like
I rarely use my phone for GoA. Once in a while I will read from my phone but rarely of that, post from it. I sometimes even find stuff on my phone and save it so I can download it to my pc so I can upload it and post here from my PC.
Work blocked forums a while ago. I’m on my home computer like twice a year, so 100% phone.
I only use the pc. Retired, at home, big screen and real keyboard.
1 Like
This is a study resource for a niche insurance community.
…is what I told them. Which worked.
2 Likes
I don’t think our net nanny blocks GoA at work, but I do know they monitor our internet/email use for cyber-security reasons so I avoid using it that way (easier to just use phone).
I mean, at one point it really was a study resource. I’m just not active in exams anymore.
Never been an actuary, likely never will attempt to be one.
What he said…
Plus I now work from home and my personal PC is on the other wall from my work computer so I don’t need to worry if the company blocks it any more. But I have used this and previous versions for professional questions especially when I (a none credentials actuarial type) was the only one in the company with actuarial knowledge and I came across questions I didn’t know.
I understand you work with a lot of data on fish. Combining that with your handle here, I assumed you might be a career changer. Seeing this post makes me wonder both how you found this place and how you picked your handle.
My sister introduced me to the AO 20 some odd years ago and I made the shift over when they shutdown the forums. The username is from my work basically figuring out whether fish will live or die.
4 Likes
