The world’s largest sovereign wealth fund has cautioned that investors face years of low earnings as the surge in inflation might prolong within the global economy.
- Nicolai Tangen, chief executive of Norway’s $1.3 trillion oil fund, stated that he expects a lasting threat in a fierce debate over whether the rise in rates was short-term or a lasting threat.
- Consumer price inflation is now at its highest level for over 20 years in the world’s big industrial economies. In the US, the annual rate of price growth rose 7% in December.
- Tangen further stated that the oil fund projects inflation could be stronger than the consensus expectations as the world experiences high demand and struggling disruption to supply chains.
- Economists are conflicted over whether the rising inflation will be temporary. Some have argued that the pandemic caused a temporary shock to supply chains.
Market measures of inflation expectations signaled investors were not largely concerned about runaway inflation.
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Source: FT