𝗪𝗲 𝗮𝗿𝗲 𝗶𝗻 𝗮 𝗻𝗲𝘄 𝘀𝘁𝗼𝗰𝗸𝘀-𝗶𝗻𝗳𝗹𝗮𝘁𝗶𝗼𝗻 𝗽𝗮𝗿𝗮𝗱𝗶𝗴𝗺
Over the last decade the correlation between inflation (measured by CPI YoY change) and the $SPX500 returns (also YoY) was clearly positive and pretty stong. Higher moderate inflation (below 3%) usually meant higher GDP growth, higher EPS growth for US corporations and generally healthy economic conditions. This naturally impacted stocks returns. Lower inflation (perios of…