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2023 Mid-Year Market Outlook

Financial Decoder

CHAPTER

The Influence of Inflation Rate on Stock Market Values

The sweet spot in terms of when the market is traded at the highest PE ratios has been in and around 2% CPI. If you get much lower than that into deflation you start to see a bit of a compression in valuations. That's starting to improve with this inflation but there's probably more work to be done.

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