2021 saw inflation arrive at the front door. With economic activity picking up again, stimuli in full force and global supply chains disrupted from the pandemic, investors are realising that our visitor might be here for a while. The question now is: how easy is it going to be to edge the unwelcome guest out the door, and what does it mean for asset allocation?
Central bank policy makers appear to have a higher tolerance for inflation than in previous cycles, even more so because of QE. They are taking their time as Covid has created a low base from which a jump in inflation is inevitable.
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