Investing Through a Structurally Inflationary Regime

Bloomberg

Steve Hou

Research

23 Pages

Bloomberg examines how portfolio construction changes when inflation is structural rather than fleeting. It links decarbonization, ageing, deglobalization, and fiscal policy to a world where stocks and bonds may hedge less reliably. The note also discusses which factors and real assets have tended to hold up better when inflation surprises.

Date published: October 2022

Key Takeaways

Inflation uncertainty: Higher inflation volatility can push stocks and bonds to fall together more often.
Factor rotation: Value and momentum may behave differently than growth when inflation shocks drive macro regimes.
Real asset toolkit: Commodities, inflation linked bonds, and trend strategies are framed as practical hedges for inflation risk.
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