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Let’s discuss the outlook for inflation in the United States.

Inflation has been a major concern for investors and policymakers over the past year, as the COVID-19 pandemic has led to supply chain disruptions and increased demand for certain goods and services. In 2022, inflation in the U.S. reached its highest levels in over three decades, with the Consumer Price Index (CPI) rising 7.0% year-over-year in November.

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Looking ahead to 2023, there are a number of factors that could impact the level of inflation in the U.S. economy. One key factor will be the pace of economic growth. The U.S. economy has been growing at a robust pace in recent years, fueled by government stimulus measures and a strong labor market. If this growth continues, it could put upward pressure on prices as demand for goods and services increases.

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Another key factor will be the supply chain disruptions that have plagued the economy over the past year. While many of these disruptions are expected to ease in the coming months, there could still be some lingering effects on prices as businesses work to rebuild their supply chains.

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In addition, the Federal Reserve will continue to play a key role in managing inflation in the U.S. economy. The central bank has already taken a number of steps to address inflation, including raising interest rates and scaling back its bond-buying program. These measures are designed to reduce the amount of money flowing through the economy and help control inflation.

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Overall, the outlook for inflation in the U.S. economy in 2023 remains somewhat uncertain. While there are a number of factors that could put upward pressure on prices, there are also factors that could help mitigate inflationary pressures. There will continue to be a “lag” time between the actions taken and the results actually achieved.  As always, it is important for investors to stay informed and remain vigilant in managing their portfolios in order to navigate any changes in the economic landscape.

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At Seth & Alexander, we are closely monitoring the situation and will continue to provide our clients with the latest insights and guidance to help them make informed decisions about their investments. We encourage you to reach out to our team with any questions or concerns you may have about the current economic environment.

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