Reflation Trade Is the New Bullish Narrative

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Reflation Trade Is the New Bullish Narrative
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Market Overview Analysis by Lance Roberts covering: XAU/USD, Gold Futures, Crude Oil WTI Futures. Read Lance Roberts's latest article on Investing.com

is becoming the next bullish narrative as equity valuation increases continue to outpace earnings gains, at least according to Gold Sachs and Tony Pasquariello.

despite numerous recessionary signals, like the inverted yield curve, manufacturing data, and leading economic indicators, the economy avoided recession due to massive governmental spending. To wit: Such was because of the massive flood of monetary support from Government spending programs. However, that monetary impulse is now reversing.is concerned, as that monetary impulse recedes, so will economic growth, as shown. Even if the economy continues to grow at 2-2.5% annualized each quarter, the annual rate of change in growth will continue to slow.over that same period. However, if they don’t, the economic growth rate will slow even more quickly without increasing monetary spending.

While the economy initially recovered from the recessionary lows, inflation, economic growth, and interest rates remained subdued despite ongoing interventions.

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