Why investors shouldn't lose sleep over inflation

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New York (CNN Business)Inflation is bad news for investors. It means people shop less, corporate profits are pinched and stocks are less valuable. High inflation increases the likelihood that the Federal Reserve will raise interest rates more quickly.

But inflation is under control for now. And there's reason to believe it will remain relatively low throughout next year, said David Kelly, Chief Global Strategist for JPMorgan Funds.
    Wages have been ticking up. But because productivity has also been rising, inflation should remain steady, he explained.
    "Stronger wage growth did not boost consumer inflation in the third quarter and probably won't do in the quarters ahead," barring dramatic changes in wage growth or productivity, Kelly noted in a recent LinkedIn post.
    Falling oil prices also mean that oil, "a traditional villain in boosting US inflation," is unlikely to contribute to inflation in the year ahead, Kelly said.
    Even the trade war is unlikely to boost inflation, he said. The trade war has made more than $250 billion of Chinese exports more expensive for Americans. But, Kelly noted, "an escalation of a trade war with China would also have strong deflationary impacts by slowing the global economy and likely boosting the dollar."
    Kelly will join CNN anchor and correspondent Paul Newton on "Markets Now" on Tuesday to further discuss inflation and offer insight into what's happening on Wall Street.
    "Markets Now" streams live from the NYSE every Wednesday at 12:45 p.m. ET. This week the show streams on Tuesday.
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