Resources/Weekly Insights

Volume 15, Edition 10 | March 23 - March 29, 2026

Staying Ahead of Inflation

Doug Walters, CFA

Inflation is back in focus as higher energy prices and global supply pressures push costs higher. This week’s Insights explores what today’s inflation drivers mean for investors, and why strategy matters more than headlines.

Contributed by Doug Walters, David Lemire, Max Berkovich, Matthew Johnson

There is a renewed focus on inflation as the conflict in Iran begins to hit consumer prices, particularly at the gas pump. Understanding inflation at the grocery store and while filling your tank is intuitive. For investors, the dynamics are more nuanced and warrant a deeper dive.

An Inflation Prediction

This week, the OECD¹ raised its forecast for U.S. inflation, citing higher energy prices, rising import costs, and renewed pressure from global supply disruptions. The organization now expects U.S. inflation to remain meaningfully above the Federal Reserve’s long‑term target this year. If their predictions prove true, it is important to know what this means for investors.

At a high level, today’s inflation story looks different from the one investors faced a few years ago. High demand is not driving up prices. Rather, it is supply-side forces, particularly within energy, that are doing more of the work. When inflation is driven by supply constraints rather than overheated spending, it becomes harder for central banks to control and harder for markets to dismiss.

A Reality Check

The next important checkpoints arrive soon. We will see the next PCE and CPI inflation reports on April 9th and 10th, respectively. These releases will offer fresh insight into whether recent price pressures are easing or becoming more embedded. Markets will be watching closely, not because a single report settles the debate, but because inflation trends shape expectations for interest rates, growth, and asset returns.

For long‑term investors, the bigger takeaway is not about any one data point. It’s about strategy.

Eroding Purchasing Power

Periods of elevated inflation quietly raise the risk of being too conservative. Cash, money markets, CDs and other low‑yielding fixed income products may feel safe because their values don’t fluctuate much. But when inflation runs higher than those yields, purchasing power steadily erodes. The risk isn’t volatility, it’s falling behind. A good retirement forecast, particularly one utilizing Monte Carlo simulations, can help identify and mitigate these risks.

Adapting to Higher Prices

That doesn’t mean investors should abandon caution or chase risk. It does mean that portfolios need to be designed to navigate inflation, not just avoid discomfort. Assets that can adapt to changing prices and grow earnings over time tend to play a meaningful role when inflation sticks around longer than expected.

Inflation is not an emergency, but it is here. In environments like this, it is important not to overreact to headlines. Instead, take this opportunity to ensure your investment strategy is built on evidence and ready to face the economic realities of today.

OECD stands for the Organisation for Economic Co-operation and Development, which is a “forum and knowledge hub for data, analysis and best practices in public policy.”

4.2%

OECD forecast for US inflation in 2026

Last week, in the wake of spiking global energy prices, the OECD raised its forecast for US inflation from 3.0% to 4.2%.

Headline of the Week

Higher for Longer, Again

The Bond Market Takes the Fed at Its Word

One of the more consequential developments of the past week did not come from a change in Federal Reserve policy. It came from how markets responded to the Fed’s decision to stand still.

Following the March FOMC meeting, Treasury yields rose across the curve, led by the front end. Expectations for rate cuts later in 2026, still common earlier this year, were quietly stripped out of market pricing. The message embedded in yields was straightforward: policy may be unchanged, but patience now carries a cost.

This repricing reflected more than a careful reading of the Fed’s projections. Energy markets added a destabilizing overlay, as rising oil prices rekindled concern that inflation progress could prove fragile. All of which had investors less willing to assume that easing remains the default outcome once growth cools. Instead, the bond market began to price a world in which restraint lasts longer than hoped, and where the next policy adjustment is no longer obvious.

The effects were immediate. Higher yields tightened financial conditions without a single rate move. Borrowing costs rose, valuation assumptions were tested, and credit spreads edged wider. In that sense, markets did some of the Fed’s work for it.

Monetary policy does not operate in isolation, and financial conditions can adjust abruptly when inflation risks re‑enter the narrative. This week, the bond market was not predicting the future. It was simply withdrawing a benefit of the doubt it had previously been willing to extend.

The Week Ahead

A holiday-shortened trading week intercepts with a jobs report coming out on a day-off. This sets investors up for another week of making decisions based on geopolitical headlines and oil price speculation.

Revision-ary

While the non-farm payroll report is expected to show job creation in March, the more critical thing to watch for is a revision to the terrible February report.

Expectations are that 48,000 jobs were added to the economy, with 51,000 of those being in the private sector. The unemployment rate is forecasted to tick up to 4.5%, and wages remain unchanged.
The last report surprised to the downside with a decline of 92,000, and speculation is that it may be revised up, meaning fewer jobs were lost in February.
Interestingly, weekly unemployment claims released on Thursday were the lowest in two years, with 1.8 million people receiving benefits in the week ending March 14th.

Keeping things Strait!

Continued disruption of the energy infrastructure in the Stait of Hormuz will play out in economic data at home.

Vehicle sales are expected to be the positive stand out in the retail sales report on Wednesday, but it will be too soon to see the impact of higher energy cost on consumer behavior as this is February data.
The ISM manufacturing index is also expected to be on the strong side, driven by shoppers stocking-up in advance of expected price hikes.

Holiday

Markets are closed on Friday in observance of Good Friday, and action is expected to be muted on the following Monday after Easter.

Happy Easter and Passover!

About Strategic

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