Catherine Keating isn’t just seeing the jump in consumer prices; she knows she’s part of the reason for it.
The head of BNY Mellon’s wealth-management business, which oversees $292 billion of client assets, was finally able in April to get back on the road after the pandemic curtailed business travel and in-person meetings. After getting vaccinated she went on her first business trip — renting a car and going to restaurants — all the things expected in the advisory business.
“I was representing the reopening of the economy and some of the sectors that drove the CPI increase,” Keating said Wednesday.
That rise in the consumer price index — which has roiled technology stocks — should be expected as the U.S. economy accelerates, but it will most likely be short-lived, she said.
“We agree with Chairman Powell that we should expect inflation and we should expect it to be transitory,” Keating said, referring to the Fed chair. “There are a lot of inflationary forces in the market right now as we’re reopening.”
‘Good shape”
U.S. consumer prices
How the pandemic is accelerating trends in financial advice and changing the way Americans manage their money.
Still, U.S. households “are in very good shape” as the country emerges from the pandemic, with more than $3 trillion in savings, she said. After last year’s run-up in technology stocks, BNY Mellon is advising clients to adjust portfolios by rotating into mid-cap, small-cap, value and non-U.S. stocks, she said.
Additionally, “there’s always a role for bonds in a portfolio,” Keating said, but “it’s a smaller role because returns are going to be much lower.”
— Additional reporting by David Westin and Jacqueline Fabozzi
