Why the market has suddenly woken up to inflation
The mantra of ‘lower for longer’ is coming under pressure as investors realise the potential damage inflation could inflict on complacent portfolios.
If any investor – professional or “mum and dad” – in almost any part of the world had to get just one call right over the past decade, it was to believe in the “lower for longer” mantra.
That is that long-term interest rates, which had lingered at or around their all-time historical lows, would remain suppressed – thus ensuring that a raft of investments from US technology stocks to Australian housing remained valuable.
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