Inflation Will Hurt Both Stocks and Bonds
The longstanding negative correlation between stock and bond prices is an artifact of the low-inflation environment of the past 30 years.
Consider that any 100-basis-point increase in long-term bond yields leads to a 10% fall in the market price.
By 1982, the S&P 500 price-to-earnings ratio was eight, whereas today it is above 30.
There are at least three options for hedging the fixed-income component of a 60/40 portfolio. The first is to invest in inflation-indexed bonds or in short-term government bonds whose yields reprice rapidly in response to higher inflation
Nouriel Roubini Project Syndicate 26 January 2022
Central banks’ resolve will be tested if policy-rate hikes lead to shocks
Nouriel Roubini Project Syndicate December 2021
https://englundmacro.blogspot.com/2022/01/central-banks-resolve-will-be-tested-if.html
Kommentarer