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Moody's: Lifers Prefer Modest Inflation Rise vs. Sharp Spike

US
Anticipating robust economic growth after the massive "monetary and fiscal stimulus -- since 2020" to "mitigate the Coronavirus' economic fallout", Moody's Investors Service says a modest rise in interest rates "should help life insurers in terms of sale and profits" while "inflationary spikes could cause stress to life insurers' balance sheets and liquidity, a credit negative."
  • "We expect a return of inflation of 2.5% over the next 12-18 months, driven by commodity price fluctuations, supply bottlenecks, and surges in demand, among other factors," Moody's Vice President Laura Bazer says. "Although we do expect sharp inflationary fluctuations, they will be transitory and normalize to the 2%-range, in line with the long-term trend."

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