Future Timberland Performance Pondered
Wednesday 25 Aug 2021
US consumers have regained their confidence, leading to a resurgence in demand for goods and services. In the first quarter of 2021, US GDP grew at an annual rate of 6.4%, and in June, the US Federal Reserve (Fed) lifted its projection for US GDP in 2021 to 7.0%.
Boosted by rates of economic growth that haven’t been experienced since the early 1980s, inflation in the United States has also bounced back strongly and has been particularly prominent in explosive increases in the prices of lumber and wood panels. The circumstances of the current episode of inflation are unique—a global economic recovery from a major global pandemic—and the lack of clear historical points of comparison raises questions concerning the magnitude, duration, and implications for timberland of this particular outbreak of inflation. Will the past relationships between inflation and the return performance of timberland hold?
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