Part 5/9:
Challenges with Inflation
Baker's analysis of inflation presents a nuanced view. While there have been fleeting moments of decline, she warns that inflationary pressures could remain a salient concern, particularly driven by labor shortages resulting in increased wage demands. Her prediction is that inflation may begin to regain traction in the back half of 2025, linked closely with the service side of the economy.
This expected return to inflation raises questions regarding long-term strategies for individuals and businesses. Baker advises businesses to lock in labor costs sooner rather than later, a tactical move in a climate where wage growth and inflation could squeeze margins.