28th July 2020
Rathbones: Inflation should stay well anchored
Will the extraordinary quantity of monetary and fiscal stimulus result in abnormally high inflation? Words to that effect form one of our most frequently asked questions this year. It’s an important one: returns from ‘fixed income’ assets such as conventional bonds can be decimated by unanticipated inflation, and although equities tend to do best in periods of slightly above-average inflation, very high inflation is a threat to their returns too.
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