- The reflation trade is worth paying attention to for several reasons - it could extend the rotation out of growth stocks into value, small cap and other relative underperformers in recent years.
- A short-term inflationary jump can be expected later this year when the vaccine has scaled out to a majority of the population and demand soars for all the things that have been off limits for more than a year.
- As long as inflationary expectations are confined to a one-off post-pandemic event, then the reflation trade, while it might persist for some time, is unlikely to imply much structural damage.
For further details see:
The Curve Steepens