Investors Brace for 70s-Style Stagflation resurgence

Stock-Market Caution: Potential Return to ’70s-Style Stagflation

Stock-market investors should remain cautious as strategists warn of a potential return to a ’70s-style “stagflation.” High inflation, occurring in three waves coinciding with geopolitical events, is the primary concern. The recent questioning of avoiding a second wave of inflation if current policies and geopolitical developments persist is causing concerns. In a negative feedback loop scenario, investors may shift focus from equities to fixed-income assets.