Some of the world’s biggest bond investors say the market is wrong to expect central banks to score a long-term win in the war against inflation.
There’s little doubt that interest-rate hikes from policy makers in the US and Europe will pull consumer-price increases down from the fastest pace in decades by slowing economic growth or setting off recessions.
But the retreat of inflation from its peak isn’t likely to mark a return to the price stability of the recent past because of stark shifts in the world economy, according to a broad group of investors and strategists at firms including Pacific Investment Management Co., Capital Group and Union Investment.
