Last year’s surge in consumer prices and the forceful response from global central banks triggered the longest-lasting co-movement of share and bond prices since the late 1990s. For most of the past two decades, equities and sovereign debt had been considered complementary securities, between which investors alternated depending on their current risk appetites.
However, as rising inflation threatened to erode future cashflows of both asset classes alike and interest rates converged toward the levels of earnings yields, 60/40 portfolios recorded their worst annual performance since the Great Depression of the 1930s.
With CPI growth projected to fall significantly and traders already beginning to price in the first rate cuts toward the end of this year, market participants will wonder whether the familiar inverse interaction of equity and fixed income returns will resume, or whether the two will continue to move in the same direction.
In this webinar, Christoph Schon, Senior Principal of Applied Research at Qontigo, analyses the impact of inflation and monetary policy on cross-asset correlations over the past sixty years and provides an outlook on where things might be heading in the future.
Christoph Schon, CFA, Senior Principal, Qontiogo
Christoph Schon, CFA, CIPM, is a Senior Principal in Qontigo’s applied research team, where he generates insights into recent risk trends with a particular focus on fixed income and multi-asset class analysis. He produces regular special reports and blog posts and holds periodic webinars. He is also a frequent speaker at industry events.
Christoph has over 20 years of experience in the financial industry, having previously worked for Dresdner Bank, Lehman Brothers, Barclays Capital, and UBS, where he held various roles as sell-side research analyst, head of client services, and client-facing quant.
Christoph has been a CFA Charterholder since November 2007 and earned the CIPM designation in 2015. He holds a joint degree in electrical engineering and economics from TU Darmstadt in Germany.