Inflation expectations

Currently, one of the biggest concerns of central banks is whether the broader society’s inflation expectations are rising. Because that could be a self-fulfilling prophecy.

From a news/state of the world perspective (central banks printing lots of cash), I would think that inflation is indeed going to be higher for longer. BUT:

From a personal perspective, I can’t think of anything I would buy now (consumption) to avoid higher prices later. Is there anything you guys bought or consider buying earlier?

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Property, and especially with a mortgage. With inflation, the real value of your debt decreases.
It may be difficult to find property which is not overpriced at the moment, but if you have a mortgage, I would not reimburse it at the moment.

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In Argentina, a few years ago, I heard that people fought inflation by buying large appliances (fridge, washing machine) and keeping them in the original unopened box, with the intent to sell as « new 2nd hand » later.

I wouldn’t try that in Switzerland, inflation too low and obsolescence too fast.

Like pwi, I would consider property, or « collectibles » that may increase in value with time (like some wines and cars).


Thanks, but what I meant is consumption. Property prices are not part of the ECB’s inflation index, as far as I know.

Fridges are a good example and you already gave the answer to that. Not buying now for fear of higher prices later.

If inflation runs hot for a while, and the ECB at some point moves interest rates up to tackle it…doesn’t that affect financing for new homes and won’t it cool down the real estate market given that new loans or re-financing will have a higher monthly payment?

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Yes it will affect the real estate market (at least in the long run). My question here is whether inflation expectations (not current inflation) have an impact on current purchasing decisions for consumption (not assets such as real estate, art etc.).

Or if you were referring to ECB measure of inflation - no it doesn’t factor in house prices. There is a long academic debate if those should be part of inflation indices.

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