Analysis-The 1970s all over again? Stagflation debate splits Wall St
By David Randall
NEW YORK (Reuters) – Phil Orlando has not heard this many people mentioning stagflation since he was a financial journalist in the late 1970s, when oil prices were soaring and inflation stood at more than double its current level.
Now the chief equity market strategist at Federated Hermes, Orlando says stagflation is poised to make a comeback and is piling into shares of companies that can thrive during periods of high inflation and slower economic growth.
“The surge in inflation is not proving to be transitory like the Fed and Biden administration have been telling us,” he said. “It’s sticky and sustained when we’re past peak growth. That’s stagflation.”
Consumer prices rose at an annual pace of 5.4% last month, on track for their highest annual gain since 1990, a surge that analysts have pinned on everything from soaring commodity prices to some $5.3 trillion in U.S. fiscal stimulus passed since the start of the…
