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Investment strategist details 'the thing that worries me most going into 2019'

Heidi Chung

With less than two months left in the year, many are looking ahead to what the future holds for the market and economy, and one strategist says there is one big potential risk ahead.

“The thing that worries me most going into 2019 and 2020 isn’t actually something to do with politics,” Brown Brothers Harriman’s chief investment strategist Scott Clemons said Yahoo Finance’s Market Movers. “It’s more to do with where we are in the economic cycle and the interest rate cycle. I’m beginning to get concerned that even though there’s no evidence of real inflation yet, it’s beginning to creep up.”

Clemons’ comments came as we learned U.S. producer prices climbed at its highest rate in six years.

He clarified that he was not making a prediction, but more so he said he will be keeping a close eye on inflation heading into the tenth year of an economic cycle.

“If you look at the wage increases that we saw last month, 3.1% wage increases, don’t get me wrong that’s great, more money in people’s pockets drives the economy, but that’s also the beginning of what feeds inflation,” he added.

Clemons noted that if inflation does indeed creep back into the picture, the Fed would have to raise interest rates more rapidly than scheduled, and that in turn could be very disruptive.

“That’s how an economic cycles have come to an end. Risk, not a projection yet, but a risk,” Clemons said.

Heidi Chung is a reporter for Yahoo Finance. Follow her on Twitter: @heidi_chung.

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