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Evaluating economic scenarios to better understand markets

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We use our ETM and ITM to define four economic scenarios. Bonds performed well in disinflationary environments, regardless of the growth rate of the economy. Conversely, bonds performed poorly in inflationary environments. Stocks liked strong growth and low inflation but lost ground during stagflationary periods. Bonds performed well after our Stagflation Index peaked.

Ned Davis Research | Fixed Income | Focus | Bi-Weekly

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