Taming inflation is proving to be a drawn-out process, despite the sharpest interest rate rises in 40 years. The result has been a tough quarter in which global equity markets fell back, while bond yields soared - the 10-year US Treasury yield reaching its highest since 2007.
Investors face three key challenges:
- Core consumer inflation is stubbornly high, at twice the Fed’s 2% target and three times the Bank of England’s.
- Central bankers may not raise rates much further, but they are still a way from cutting them.
- Oil prices have climbed 24% over the past three months, jeopardising hard-won gains in combatting inflation.
Join Guy Monson as he examines how investors can adjust their asset allocation for this environment.