The Biggest Tail Risk in Markets Has Shifted
With belief in an inflationary boom now the consensus, the key danger is that the Fed will move too late.
Watch when it moves.
Photographer: MarkBridger/Moment Mobile/Getty Images
Inflation is the topic of the moment. Some cynics can argue that it’s only such a big deal because I and other journalists have made it so. But judging by the number of Bloomberg clients who fired in questions for the live blog Q&A session we held on the terminal Tuesday, there is quite a lot of interest out there in the financial markets. And it is the interest in inflation from investors and other consumers of financial journalism that prompts people like me to write more about it; we have the perfect example of reflexivity, in which perceptions can change reality.
Beautiful evidence that the current preoccupation with inflation doesn’t just come from journalists appears in the latest monthly Fund Managers Survey from BofA Securities Inc. Belief in an inflationary boom is its highest since the survey started: