economy
Investors are left with nowhere to hide as stagflation shock erodes traditional havens
"Government bonds and gold are not providing ballast as equities fall," BlackRock strategists said.
TL;DR
- Global markets are experiencing a supply shock, diminishing the effectiveness of traditional safe havens like government bonds and gold.
- Rising commodity prices and geopolitical tensions are fueling inflation and debt concerns, pushing bond yields higher even during risk-off periods.
- The current market dynamic is compared to 2022, where supply disruptions led to wage and services inflation.
- Investors face limited defensive options as both equities and fixed income struggle amid slowing growth and persistent price pressures.
- Some see potential recovery for risk assets in the medium term, with specific interest in AI-themed U.S. equities and emerging-market hard currency debt.