Reinhart Week in Review by Madison Investments 11.12.2021


INFLATION

The consumer price index (CPI) rose 0.9% in October and has increased 6.2% over the past year. Producer prices (PPI) also escalated, growing 0.6% in October and 8.6% year-over-year.

Our Take: Inflation has proven to be more persistent than many economists previously believed. Year-over-year CPI is now at its highest level since 1990 and shows few signs of slowing any time soon. Demand continues to be robust as the holiday shopping season begins, while supply is still constrained by bottlenecks in the supply chain. The Fed insists that inflation will subside but reports like these are sure to test their patience.

MUNICIPALS

New York, New Jersey and Connecticut lawmakers ended their stalemate and reached a last-minute agreement on how to split $14 billion of federal coronavirus aid allocated to transportation. The Metropolitan Transportation Authority (MTA) will receive over $10 billion. New Jersey will receive $2.66 billion, and Connecticut will receive $474 million. New York will receive $10.85 billion, which includes the funds for the MTA. An agreement was due to the federal government this week in order to apply for $2.2 billion of additional funds from the American Rescue Plan.

Our Take: Lawmakers from New York, New Jersey and Connecticut have been working for months on how to divide the federal funds without an agreement until this week. A compromise was necessary, as the additional funds will help the agencies recover from the effects of the pandemic and avoid service disruptions.

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This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.
Although the information in this report has been obtained from sources that the firm believes to be reliable, we do not guarantee its accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the firm’s judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security.