Inflation, the monetary-policy response, and their impact on financial markets
With consumer-price growth staying at multi-decade highs, financial markets have been pricing in an increasing number of central-bank rate hikes. Commercial banks have been among the biggest beneficiaries of higher interest rates and bond yields, while energy and mining companies have profited from surging commodity prices. Tech and growth stocks, in contrast, have seen their market capitalisations plummet. Should inflation numbers continue to surprise on the upside and induce rate setters to tighten monetary conditions even more aggressively, this trend is likely to continue. However, if central banks were not to raise rates as anticipated—for example in case of a renewed COVID outbreak—those gains and losses could well reverse.
Join Christoph Schon, CFA, in this webinar to hear in more detail how either scenario is likely to affect various asset classes, sectors, countries, and regions.
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