Keep Your Wits About You: Inflation Creeping In

Peter Boockvar discusses a potentially higher inflationary environment for 2021 and why that may put central banks and markets at odds.

• A potentially higher inflationary environment for 2021 may put central banks and markets at odds.
• This year’s market trends and the latest ISM manufacturing data point to supply chain disruptions, labor cost pressures, and a general rise in inflation.
• With markets looking past recent COVID-19 data with promising vaccine announcements, value is growing increasingly attractive here in the U.S., the U.K., Europe, and Asia.
• Markets could tighten with the onset of growth and the Fed will have to choose whether to let the yield curve steepen or prevent it.
• Should the inflation narrative take hold, it could shock global bond markets.

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