Wednesday, February 16, 2011

Inflation Fears and Stock Valuations: Is it All Bad?

Inflation fears and financial market reactions have recently become a daily event. Headlines such as “Gold rises on inflation fears,” “China’s inflation accelerates …” and “UK Inflation soars 4% in January.”  Headlines are designed to grab attention but they leave two legitimate underlying questions for stock market investors.
There may be inflation fears, but what is the trend for inflation expectations?
How do inflation expectations drive stock values?


Post a Comment