BNY Mellon’s Keating Back on the Road Sees Inflation First Hand

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Catherine Keating isn’t just seeing the jump in consumer prices, she knows she’s part of the reason for it.

The head of Bank of New York Mellon Corp.’s wealth-management business, which oversees $292 billion of client assets, was finally able in April to get back on the road after the pandemic curtailed business travel and in-person meetings. After getting vaccinated she went on her first business trip -- renting a car and going to restaurants -- all the things expected in the advisory business.

“I was representing the reopening of the economy and some of the sectors that drove the CPI increase,” Keating said Wednesday in an interview with Bloomberg TV.

BNY Mellon’s Keating Back on the Road Sees Inflation First Hand

That rise in the consumer price index -- which has roiled technology stocks -- should be expected as the U.S. economy accelerates, but it will most likely be short-lived, she said.

“We agree with Chairman Powell that we should expect inflation and we should expect it to be transitory,” Keating said, referring to the Federal Reserve chair. “There are a lot of inflationary forces in the market right now as we’re reopening.”

‘Good Shape”

U.S. consumer prices rose last month by the most since 2009, topping forecasts and intensifying the already-heated debate about how long inflationary pressures will last. The gain in the overall CPI was twice as much as the highest projection in a Bloomberg survey of economists.

Still, U.S. households “are in very good shape” as the country emerges from the pandemic, with more than $3 trillion in savings, she said. After last year’s run-up in technology stocks, BNY Mellon is advising clients to adjust portfolios by rotating into mid-cap, small-cap, value and non-U.S. stocks, she said.

Additionally, “there’s always a role for bonds in a portfolio,” Keating said, but “it’s a smaller role because returns are going to be much lower.”

©2021 Bloomberg L.P.

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