U.S. inflation getting Trump lift: Wall Street strategist

Mon Jan 30, 2017 2:45pm EST
 
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By Michael Connor

NEW YORK (Reuters) - Long hibernating price inflation is taking center stage in America's economy, in part because President Trumps' anti-migrant policies are fueling already rising wages, a top Wall Street asset strategist said on Monday.

Richard Bernstein, a celebrated asset allocator who oversees $3.1 billion at investment firm Richard Bernstein Advisors LLC, also told the Reuters Global Markets Forum that U.S. corporate profits reflected economic growth, that equities will outperform fixed income assets in 2017, and that few investors are prepared for a migration from deflation (global deflation ending).

The following are edited excerpts from the conversation:

Question: Are President Trump's immigration and border security policies affecting prices in the US economy and prospects for investors?

Answer: Inflation is indeed the risk going forward. Just look at bond investors' attitudes. Immigration is an important part of the U.S. labor market, and wages are already rising. In addition, businesses report having increased trouble hiring qualified workers. Removal of a global workforce will cause wage rates to rise further, I think.

  Continued...

 
Richard Bernstein, the chief executive officer of Richard Bernstein Advisors LLC, speaks during the Reuters Global Investment Outlook Summit in New York City, U.S. November 18, 2016.  REUTERS/Lucas Jackson