Jean Boivin, the head of research for BlackRock Investment Institute, thinks that the next big crisis to the global market could come from slow growth and higher inflation according to Business Insider.
In theory, growth and inflation should move up or down together, so if Boivin is correct, it would be a shock for both markets and investors.
“There have been periods where we’ve seen them moving in different directions,” Boivin said. “This is why we’re emphasizing it, because the last five years have not been representative of history and we could see this type of combination.”
He continues, “Asset classes will not be the same way they have been over the last five years if we were to enter that world.”
Boivin believes trade protectionism would be the cause of the slowed growth and higher inflation. He says that if free trade continues to be restricted by global economies, the price of goods would rise and economic output would be hindered.
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