Vanguard Economists Say: Inflation Might Be Better Than It Looks. Here's Why That's Good News for Stocks.

Résumé détaillé

Inflation has been hanging over the U.S. economy like a cloud. The latest Consumer Price Index (CPI) data for October 2026 found it increased by 0.4% last month, after rising 0.6%…

Inflation has been hanging over the U.S. economy like a cloud. The latest Consumer Price Index (CPI) data for October 2026 found it increased by 0.4% last month, after rising 0.6% in September.

The current inflation data is nowhere near as bad as it was in 2022, when the inflation rate reached highs over 9%, but it's trending in the wrong direction. Many Americans are feeling pessimistic and worn out from stubbornly high costs of living.

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Higher-for-longer inflation motivated the Federal Reserve to hike interest rates by 0.25% at its September meeting. The Fed is also widely expected to raise rates again at its next meeting on Dec. 9, with CME FedWatch forecasting a 90.8% chance of a 25-basis-point hike and a 9.2% chance of a 50-basis-point hike.

Higher interest rates can be bad for stock prices because they raise borrowing costs and reduce the supply of money that's available for investment and economic growth. But recent analysis from Vanguard offers reason for hope.

Let's look at why Vanguard is optimistic about inflation for 2027 -- and what it might mean for your investments.

According to Vanguard, a major driver of inflation in 2026 was the Trump administration's new tariffs in 2025. But those tariffs were technically a one-time price increase; the tariffs don't keep going up every year. That means next year's inflation data might look more encouraging, because any increase in inflation will subtract from a higher base -- the 2026 inflation numbers that already included tariffs.

Vanguard forecasts that core inflation, as measured by the Personal Consumption Expenditures (PCE) price index, could drop to 2.5% by April 2027.

And Vanguard says this downward move in inflation would come solely from the…

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