The rise in expected inflation is clearly having the expected effects - Natixis

Patrick Artus, Research Analyst at Natixis, points out that in case of the United States and the euro zone, expected inflation has been rising since late 2016.

Key Quotes

“This rise in expected inflation has since then (from early 2017 or only from early 2018) had the effects we could expect:

• Rise in expected short-term interest rates, rise in long-term interest rates;
• The rise in long-term interest rates exceeding the upward revision of growth, decline in equity valuation;
• Rise in the price of gold and other safe-haven assets used to hedge against inflation (Swiss franc);
• Expected reduction in available liquidity, and therefore a fall in the prices of assets for which demand is linked to liquidity (bitcoin).”