global markets outlook
While there is a powerful argument to be made that the extreme indebtedness of the U.S. government and sovereign nations all together, the magnitude of economic stimulus, and the growth in the money supply pose a great inflation threat, on contrary in the short-term inflation will be kept at bay while its counterpart – deflation – will pose the greater risk. The time horizon matters tremendously in assessing whether inflation or deflation will be the greater risk. With interest rates continuing to drop, the possibility that the U.S. may face a period of deflation in the year or three years ahead needs to be taken into account, says Yulian Isakov Senior Investment and Market Strategist of Isakov Group. Deflation tends to keep interest rates and yields low. While low yields for most types of government debt are even less attractive today from a valuation perspective, this same scarcity of yield may create opportunities within certain investments such as high-yield and investment-grade bonds and emerging market debt. Every month, Isakov Planning Group market strategists share their insights and outlooks on the global markets to investors. Speak to an Isakov Planning Group Financial Advisor to make the most out of these insights.
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