A New Era of Higher Inflation Risks | Idea Farm

A New Era of Higher Inflation Risks

Bridgewater

Ziad Hindo, James Riseley

Research

17 Pages

November 2025

Bridgewater says most portfolios remain poorly equipped to manage structurally higher inflation risks than pre-COVID.

Published Date: September 22, 2025

Key Takeaways

Secular Shift: Inflation’s “resting heart rate” has risen, with 2% now a floor rather than a ceiling amid persistent upward pressures.

Portfolio Vulnerability: Traditional 70/30 portfolios remain ill-equipped for inflation spikes that erode real returns and force tighter liquidity.

Hedging Opportunity: Inflation protection is still inexpensive, offering investors strong risk/reward potential to rebalance portfolios for resilience.

Portfolio Management Diversification Asset Allocation

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