Bloomberg Surveillance Traders Weigh CPI and Policy Eco Impact
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Feb 12, 2025 
Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, shares her insights into how inflation impacts stock markets and investing strategies. Huw van Steenis, Vice Chair at Oliver Wyman, discusses the significance of private credit in today's economy. French Hill, a US Republican Representative, talks about his role in addressing budget challenges and fiscal responsibility. Together, they explore the complex interplay between inflation, equities, and the broader economic landscape, offering a rich blend of analysis and humor.
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Inflation and Stock Performance
- Inflation has historically been a friend to stock investors.
- Equities have consistently outperformed inflation in the long run.
Correlation of Bonds and Stocks
- In volatile inflation periods, bonds and stocks are inversely correlated.
- During stable inflation, like the Great Moderation, they correlate positively.
Analyzing Tariff Impact
- Consider the 2018 Trump trade war's impact on specific tariffed goods' inflation, not overall inflation.
- PPI might be a better indicator than CPI for tariff effects.
