Inflation: Short-term aberration or longer-term threat?

The rapidly increasing administration of COVID-19 vaccines, coupled with the imminent flood of fiscal stimulus from the American Rescue Plan Act, has generated widespread expectations that the US economy will boom in the second half of 2021. Along with that optimism, however, comes concerns that inflation could spike, at least in the short term. In the Q&A below, Sushil Wadhwani, chief investment officer of QMA Wadhwani and former member of the Bank of England’s Monetary Policy Committee, offers his thoughts on the inflation question and what an uptick in pricing pressures could mean for the performance of risk assets.

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