Nasdaq chief economist Phil Mackintosh shared a complex picture of the US and world economy, speaking at the PostTrade 360° Stockholm conference Thursday. There is little inflation to be seen at the moment, but under the surface it could be a bubbling threat to post-covid recovery.
“Most people have moved from worrying about the coronavirus to worrying about interest rates and inflation,” said Phil Mackintosh, online from the US.
Things that are in demand, such as take-away food, have actually had prices rising during the expansive public policy measures under the covid-19 pandemic. This indicates that inflation could gain speed when economic activitiy picks up again this autumn, when most people have received their coronavirus jabs. But currently, the upward pressure on prices is neutralised by people stuffing their money in their mattresses rather than shopping. The velocity of money has gone down.
“The risk is rather that we are running too hot than too cold.”
Additionally, a possible worry for investors is a notable rise in 10-year government bond interest rates in the last few months. By historical parallel, it is an indicator that stock price-to-equity ratios could be about to come down.
• PostTrade 360° Stockholm 2021 took place on 25–26 March. News around the event is gathered here.
• Find the 44-page event magazine here.
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