Inflation rate: Increase has little impact on economic recovery

Interview with John Woods: Optimism despite rising inflation

The markets will be preoccupied with the rising rate of inflation in the first half of 2021. Yet, the increase might prove to be fleeting. The signs in the financial markets are favorable, so further economic recovery is possible.

Rate of inflation likely to increase

We are expecting to see a jump in inflation towards the middle of the year. That could perturb the markets. "One reason for that is concern that virus mutations could have a negative impact on the markets and cause prices to spike," says John Woods, Regional CIO for APAC at Credit Suisse. On top of that, the baseline effect from last year is creating inflationary pressure. However, this trend might just be temporary. John Woods provides reasons for that assessment in this interview.

Credit Suisse House View, February/March 2021

John Woods talks about inflation concerns in the markets and their impact.

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The economy continues to recover

John Woods is optimistic about the second half of the year: "At the moment, the economy is in the process of recovering from last year's recession." Accordingly, our Investment Committee is also leaning toward increasing the risk weighting in its investment profile. Reasons for that include not only the underlying economic growth but also surging corporate profits in the US. Yet, the expert is less worried about other areas, such as the Chinese economy. Watch the video to learn what other areas those are and what opportunities present themselves to investors.

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