Report
Financial markets do not at all expect inflation to return in the medium term
Long -term inflation swaps in the United States and the euro zone show that financial markets do not at all expect inflation to return in the medium or long term. Yet, given: The increasing corporate concentration; The return to regional value chains; The low productivity gains; Population ageing; The possible end of wage austerity policies, it is likely that inflation will actually return, not in the short term but later. We know that: It will be a drastic shock, given the debt accumulated during a period of low interest rates; Real assets (shares, real estate) do not protect against inflation: their prices fall in line with a rise in long-term interest rates caused by inflation; Hedging against the risk of inflation is inexpensive currently, since inflation is not expected.
Provider
Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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