State Street: Watch Out for March Inflation Figures

March's US inflation figures could upset stock markets, says State Street economist Michael Metcalfe - prices are on the rise

Emma Wall 17 January, 2018 | 3:02PM
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What will upset the Goldilocks economy?

Stock markets were buoyed by a potent combination of global economic growth and low inflation last year – known as the Goldilocks economy. This not too hot, not too cold, environment has meant stocks and bonds across the globe rose in value last year, almost without exception.

But as we begin a new year, the question is; how long will it last? The two threats to the Goldilocks economy are that either of the dual factors – growth or inflation – disappoints. This is because if either one of these metrics shock central bank policy makers, it would force them to make a decision about interest rates. This in turn would create volatility in stock markets, as institutional and individual investors alike flee less attractive assets for those that offer a better return.

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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