Readers will be familiar with BofA strategist Michael Hartnett who has done a great job of forecasting the current market meltdown. Today, I want to engage on another of his frames of reference:
2020s a decade of regime shift to higher inflation, higher rates, higher volatility = lower asset valuations, driven by trends in society (inequality), economic policies (QT, redistribution, taxation), politics (populism/progressivism), geopolitics (war), environment (net-zero), economy (de-globalization), demographics (China population decline), all inflationary.
Globalization to isolationism, capitalism to socialism, elitism to populism big investment trends, but others include end of QE, buybacks, low taxation…Fed won’t be buying $8tn of financial assets in next 14 years…corporations won’t be buying $7tn of stock in next 12 years…corporate taxes won’t be cut in half next 25 years (Chart 7…and the richest sector of all, technology, unlikely to remain the least taxed sector going forward, bar utilities).
