Will the COVID-19 pandemic drive us into a higher inflation regime? This is a key unresolved question facing investors. In this publication GSAM economists discuss potential reflationary developments including substantial policy easing and disinflationary factors such as the adoption of automation and e-commerce as summarized in the table below. We expect tepid inflation outcomes in the near-term, given low demand and high unemployment. Further out, the journey to a higher inflation regime is likely shortened by developments we see today. But we are not there yet.
1Source: Analysis by the International Renewable Energy Agency (IRENA). The European Green Deal provides a roadmap with actions to boost the efficient use of resources by moving to a clean, circular economy and restore biodiversity and cut pollution.
Source: GSAM. As of August 2020. Views and opinions expressed are for informational purposes only and do not constitute a recommendation by GSAM to buy, sell, or hold any security. Views and opinions are current as of the date of this presentation and may be subject to change, they should not be construed as investment advice