Writing an opinion piece for The Australian Financial Review, GSFM’s Investment Strategist Stephen Miller, examines the prospects of rising US inflation.

Inflation looks to be on the march. The US April core consumer price index came in well ahead of expectations at 3 per cent, the highest rate of increase in 25 years.

But the signs were there.

The prices paid component of the April Chicago PMI skyrocketed to a 41-year high. To put that in some context, this level was last reached in 1980 when inflation in the US hit 13 per cent, after a massive spike in oil prices in the wake of the 1979 Iranian Revolution.

Nationally, purchasing managers reported suppliers struggling to meet demand. Order backlogs are at their highest in 40 years.

Commodity prices are surging.

Warren Buffet in his annual address to Berkshire Hathaway investors said he was surprised by America’s “red-hot” rebound and that he was seeing “very substantial inflation”.

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