Investors eye Saudi inflation plays as Fed turns hawkish

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Riyadh

Saudi investors should ensure their portfolios include inflation exposure as global prices continue to accelerate, said a Credit Suisse banker.

The Federal Reserve signaled it may act sooner than previously planned to start dialing back its low-interest-rate policy as inflation gathers pace worldwide.

Fed policymakers forecast that they would raise their benchmark short-term rate twice by late 2023. They had earlier indicated rate hikes would not happen before 2024.

“Certainly inflation and inflationary exposure is the name of the game now, Fahd Iqbal, Credit Suisse head of private bank Middle East research, told Bloomberg TV on Thursday.

“There are transitory aspects of inflation, not just in Saudi but in the US and globally — but once that transitory spike abates and we see inflation come down again, we will see structural factors that will help keep inflation higher than we’ve been accustomed to and that’s going to be the case for some time to come.”

Saudi inflation rose for a second straight month in May as the consumer price index hit 5.7 percent.—AN

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