Last week in the U.S., The Federal Reserve raised its benchmark interest rates by another three-quarters of a percentage point and indicated it will continue to rise well above the current level. Rent and other shelter costs have become a key source of inflation in recent months. Unemployment is seen climbing to 4.4 percent in 2023 and 2024, based on the Fed’s estimates, up from 3.7 percent now.

Jas Thandi, partner of portfolio strategy at Aon, recently examined the Fed’s interest rate hikes, GDP outlook and market sell-offs with Yahoo! Finance Live. Thandi stated, “With our clients, it’s really looking at things backed by real assets, like real estate, some type of infrastructure funds based on the Inflation Reduction Act spending that’s going on.” Watch the interview here.  

In other parts of the world, India’s inflation rose to 7 percent in August and has stayed above the central bank’s tolerance for eight straight months through last month. A recent Aon survey found Indian employers are likely to raise staff pay by 10.4 percent next year, with an average 10.6 percent increase so far in 2022. According to Roopank Chaudhary, partner of Human Capital Solutions at Aon India, “The (salary) increase is a reflection of the confidence that corporate India has on its strong business performance. Business leaders, however, need to balance the impact of rising costs and salary pressures with a relatively high rate of attrition and the ongoing demand for talent.” Read more about pay raises and inflation occurring in India in Reuters.

Experts at Aon have commented on the impacts of inflation, including losses from natural catastrophes globally, increased food security risks, rising health care costs and more. Learn how Aon helps clients mitigate inflation risk here.