In Bridgewater’s Global Observations, co-CIO Karen Karniol-Tambour discusses why she sees a fundamental paradigm shift to a more inflationary world that markets are being slow to adjust to, as businesses and policy makers operate in a context of greater geopolitical tensions and decarbonization.
She also shares how this is playing out in the current cycle across major global economies. In the US, “The bottom line is this is not a 2% inflation world,” and getting down to 2% would “take either much more economic weakness than we’ve already seen or significantly more tightening.” Easing energy prices have provided relief for Europe, but policy makers will continue to struggle with a fundamentally less competitive economy. Japan is an outlier in the developed world where inflation is not a problem yet, and their policy is getting easier on a relative basis.
Listen to or read the full interview where Karen goes into more specifics, shares why she views China as one of the most critical factors and largest uncertainties for investors, and discusses the biggest mispricings in markets today. She also shares her reflections on how “growing up” in Bridgewater’s unique culture has helped her become the investor she is today and how the co-CIO position differs from the role she’s been playing.
Click here to see full discussion or listen to podcast recording.
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.