Understanding U.S. dollar inflation risk

Inflation expectations influence how markets price currency risk and how portfolios experience real purchasing power changes. When inflation rises faster than expected, USD-denominated cash flows can lose real value, even if nominal balances remain stable.

Common lenses for evaluating inflation risk include:

• Real yield trends relative to nominal yields.
• Commodity and import cost sensitivity for USD-based holdings.
• Time horizon alignment between cash needs and inflation exposure.

This overview is intended to help clients ask better questions and understand the building blocks of inflation analysis.

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Disclaimer: This insight is for educational purposes only and does not constitute investment advice or a recommendation to buy or sell securities.