We're at a Big Macro Turning Point
Real Vision: Finance & Investing
00:00
The Future of Bond Equity Correlation
Bond equity correlation will be negative, but there'd be more frequent periods where it's positive. What drives that correlation? Well, it's the nature of inflation. So if you're in a world where you only ever have demand shocks, then inflation becomes procyclical. And when inflation is procyclical, your bond equity correlation is negative. But during those supply shocks, inflation becomes countercyclical. That's what we had last year. It's going to be all about commodities. I think you're waiting towards value rather than growth. You know, buying volatility has more of a chance of working because you probably won't have these three-year periods where it does nothing.
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