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ECB’s De Cos Backs Fed-Style Strategy of Inflation Overshoot

(Bloomberg) — European Central Bank policy maker Pablo Hernandez de Cos added his support to arguments for a Federal Reserve-style strategy that allows officials to temporarily overshoot their inflation goal.

Echoing comments a day earlier by President Christine Lagarde, the Bank of Spain governor said it’s worth examining a more “symmetrical” inflation target. The ECB should make it clear “that the degree of acceptance for inflation deviations above the target will be the same as when such deviations are below.”



a man wearing a suit and tie: Key Speakers At The IIF Annual Membership Meeting


© Bloomberg
Key Speakers At The IIF Annual Membership Meeting

Pablo Hernandez de Cos

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Photographer: Zach Gibson/Bloomberg

His remarks are the latest signal that the ECB’s first strategic review in almost two decades will likely conclude with a recommendation to change the current inflation goal of “below, but close to, 2%.” Officials have increasingly voiced concern that such phrasing emboldens calls for tighter policy too soon, before price

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Use WisdomTree’s Model Portfolios to Ward off Inflation

Advisors looking to protect client portfolios against the ravages of inflation should consider strategies beyond Treasury Inflation Protection Securities (TIPS). For example, some model portfolios offer a unique blend of equity, fixed income and alternative assets that can bolster inflation protection.

WisdomTree offers a series of model portfolios with endowment-style strategies that can help advisors deploy alternative assets while mitigating risk.

“Endowment is a reference to including non-traditional assets in addition to stocks and bonds, similar to a strategy that many endowments employ. The strategies may use both WisdomTree and non-WisdomTree ETFs. It typically includes U.S. and international equity and fixed income funds, along with different types of alternative strategies,” according to WisdomTree.

There are some indications this model portfolio is a relevant consideration today.

“While the overall economic environment probably points to inflation remaining low, there are still pockets of inflation here and there. Supply-chain disruptions and plant closures

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