Report
What are the consequences of high inflation variability?
We believe that, structurally, inflation variability will be high in OECD countries (we look at the United States and the euro zone) since, during the energy transition, the supply of fossil fuels may fall faster than demand for fossil fuels, leading to periodic sharp increases in energy prices. What would be the consequences of high inflation variability? High variability in real wages, and therefore in consumption and therefore in growth; High variability in real interest rates, and therefore in asset prices; A high risk of holding nominal bonds (with a fixed nominal interest rate), and therefore strong demand for hedging against inflation risk, rising inflation risk premia and steepening yield curves.
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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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