“We should think carefully about how this populist shift will affect the investment landscape. It is unlikely to prove transitory. It calls into question the low and stable inflation of recent decades and it threatens to expose government bond markets in particular — vulnerable as they are to a shift in perceptions of inflation risk.”
USAGOLD note: This opinion piece from JP Morgan’s chief market strategist for the UK and Europe lays out the shifting tides affecting the market view on inflation globally. Tariffs are only one factor in the rising populist tide (both left and right) affecting market psychology. Ward does a good job of outlining the grounds for a major shift in perception on inflation – one that is already affecting not just bonds (her area of concentration) but the financial market as a whole.