Join Adam Hetts as he speaks to Jim Cielinski, Global Head of Fixed Income, about the direction of inflation and some of the potential pitfalls in traditional “inflation protection” tools.

Key Takeaways

  • Base effects are distorting inflation figures; a permanent rise in inflation likely requires a closing of the output gap and momentum in wage inflation.
  • Treasury Inflation Protected Securities (TIPS) and floating rate securities may solve one type of risk but can open up investors to other underappreciated risks. Furthermore, investors are not absolved of the need to avoid overpaying.
  • The world may be less synchronized exiting the pandemic, creating potential opportunities for active investors in emerging markets and across the credit spectrum.