Get set for the next inflation scare

The “reflation trade” is coming under pressure. But politicians’ ongoing fiscal splurge means that inflation will come eventually.

Covid vaccination centre in Florida
Investors are concerned that the Delta variant of Covid-19 will wreak new economic havoc
(Image credit: © Alamy)

The world’s governments have crossed “the Rubicon of fiscal rectitude to a reach a new land”, says Albert Edwards of Société Générale – “one where their existing monetary profligacy can now be coupled with fiscal debauchery”. There is no “turning back now the sweet fruits of monetary-funded fiscal largesse have been plucked and tasted”. So why are bond yields – the borrowing costs of those governments – falling again?

Reflation trade in reverse

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.