The stagflation narrative seems to be gaining momentum. And it would be even stronger if it wasn’t for strong earnings of a handful of tech companies. If in fact we are entering in a period of low growth and high inflation, we can look at similar periods in the recent past and see what worked and what didn’t by asset class; during 1971-1981, Treasuries and corporate bonds were the worst investment, as Inflation made their yields unatractive, stocks were also a bad investment due to the lack of growth, and only real assets performed well. Precious metals were also an incredible investment in that period. The path from here, depends to some extent on what the Fed does, and if Congress keeps spending above the country’s income.
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