Perpetual warns Fed, RBA underprice near-term inflation risk from AI investment boom
TLT•Perpetual warned that the Fed and RBA may be underestimating near-term inflation and interest-rate risks from an AI investment boom and higher oil prices. It said Australian rate pricing looked “late and light,” with markets not fully pricing a final hike until May.
1. Inflation risks
Perpetual flagged upside risks to inflation and interest rates from higher oil prices and short-term cost pressures linked to an AI investment boom. It said Australian rate pricing looked “late and light,” with markets not fully pricing a final hike until May, and cited RBA minutes, Australian labor data, US CPI and retail sales, and a Fed Chair Warsh appearance as near-term catalysts.
