Bullish Economy: But will it last?

pile of grocery items

The US is in a bullish economy as of late, as companies look to rebound from the effects of the pandemic.

Demand is skyrocketing, as suppliers struggle to keep up with the demand. But inflation seems to be on the mind of many investors, as it seems to be looming behind this bullish economy. Warren Buffet recently held Berkshire Hathaway’s annual meeting for 2021, and he had some comments on inflation.

Buffet commented, “We are seeing substantial inflation. We are raising prices. People are raising prices to us, and it’s being accepted.”

But we see that large US companies are all raising prices during this bullish landscape. Common products like tissues and sodas face higher prices during the coming quarters, as companies cite higher production costs as the main reason. But it seems that since people have been saving for a while, demand will be unwavering.

A big factor that will determine the outlook of the economy is the employment report for April. The unemployment rate is projected to fall from 6% to 5.8%. The Fed is pursuing a steady inflation rate of 2%, so consumers can expect higher prices across the board as well.

 

Sources: CNBC, Aljareeza, Yahoo

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Morgan Tseng

Morgan Tseng is a senior studying Business Economics and Business Information Management at University of California, Irvine. He has a background in research and analytics as he spent a quarter participating in the research of the Development Finance Corporation and its effects on developing countries. He is passionate about the investing landscape today, and the ebb and flow of bull and bear markets. He believes that credibility and ethics are the most important parts in business. In his spare time, he loves to play the guitar and piano.