01 Mar 2023 1 min read

Chart of the month: price pressure persists

By Ben Bennett

Sticky inflation makes more aggressive US rate hikes more likely, limiting the chances of a soft landing.


At the beginning of the year, hope grew that the US economy could be coming in for a soft landing – consumer data was strong, and inflation looked to be falling rapidly.

But we’ve recently had a few signals that activity is stalling, with data revisions now pointing to more price pressure at the end of the year. As you can see in the chart, service sector inflation looks particularly sticky.

Under such circumstances, consumer strength is actually a headache for the US Federal Reserve (Fed). How is the Fed going to get prices to stop rising when everyone is out spending money? The answer could be more aggressive rate hikes and a narrower path to a soft landing.

And if 2022 taught us anything, it was that’s not a good backdrop for markets.

Ben Bennett

Head of Investment Strategy, Asia

Ben joined LGIM’s London team in 2008, initially focusing on credit strategy before taking on the role of Head of Investment Strategy and Research, coordinating LGIM’s research from long-term themes to short term market drivers. He also chaired the monthly investment macro meeting for many years, a key input for portfolio risk across the active strategies. He relocated to Hong Kong in 2020, joining the LGIM Asia Board as a Director and was appointed Head of Investment Strategy, Asia, to help grow LGIM’s investment business across the APAC region. Ben started his career in 1999 as a credit strategist at Dresdner Kleinwort Benson in London, before performing the same role at both BNP Paribas and Lehman Brothers. Ben holds an MA in Mathematics from Queens' College, Cambridge University.

Ben Bennett