History may not always repeat itself, but it often rhymes. The current inflation cycle shares noticeable resemblances with the 1970s, characterised by energy-driven price shocks and repeated waves of price increases. Based on these observed patterns, could markets be underestimating the risk that the toughest phase is yet to come?
The market’s old enemy may be stirring once again. With geopolitical tensions elevated, energy markets remaining volatile, and the possibility of supply disruptions still hanging over the global economy, investors are beginning to ask a question many thought had been settled years ago: Could the inflation dynamics of the 1970’s be re-emerging?