And if anything happens with inflation it is not likely to be
good. If there is a rise in inflation, say to 4 percent, that will
kill the bond market, sending prices and returns for investors
down. Stocks will be undermined by the higher interest rates,
and rising inflation will make future corporate profits less attractive. If there is a further decline in inflation, deflation becomes
a threat, and the fallout on both stocks and bonds would
be even worse.
good. If there is a rise in inflation, say to 4 percent, that will
kill the bond market, sending prices and returns for investors
down. Stocks will be undermined by the higher interest rates,
and rising inflation will make future corporate profits less attractive. If there is a further decline in inflation, deflation becomes
a threat, and the fallout on both stocks and bonds would
be even worse.
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