The new year seems to be young but already a very clear topic is presented in financial markets.
According to the Bank of America, inflation funds outperformed deflationary funds since 2006.
Bank of America says inflation funds include GSG products,
real estate, inflation-protected securities, U.S. banks and value stocks. Default funds include TNX government bonds,
corporate bonds, the S&P 500 SPX,
and growth stock.
Investors are pouring their money into the subject of inflation. Last week saw the second largest inflow to energy stocks, the third largest inflow to inflation-protected securities, the sixth inflow into emerging markets, and the inflow. largest flow to bank loans in nearly four years, according to Bank of America. data. City bonds, which are exempt from federal taxes and most state taxes, have seen higher inflows.
The topic of inflation is playing out in response to unprecedented central bank and fiscal stimulus, as COVID-19 pandemics continue to plague many businesses. On Thursday, U.S. President Joe Biden unveiled his $ 1.9 trillion recovery proposal, while Federal Reserve Chairman Jerome Powell said the speech on reducing bond purchases is premature.
“Many global inflation trends coincide with vaccine / reopening / supply catalysts,” said Michael Hartnett, chief investment strategy at Bank of America.