We’re living through a time with little historical context, and it calls for new terminology.
As evidence-based investors, we typically rely on historical stock market and economic data from the past one hundred years to answer the common questions we’re hearing from our clients. Every once in a while, however, we come upon a question without much historical context – and the current environment certainly qualifies. We’re currently experiencing the characteristics of a global pandemic, an ongoing economic recovery, strong stock market performance, a historically low-interest rate environment, and huge dislocations in the supply chain. We’re calling it “panflation” – an inflationary environment that has been created by a pandemic. It’s different from traditional inflation and from stagflation, and we examine why in this atypically non-historical episode.