Inflation? “A paper tiger” – “Theinflation jumped to the front page amidst the concerns of markets and economists “;” after so long in which countries (and central banks) feared deflation and yearned for inflation, when it arrives (or seems to arrive) there are those who warns against a return of that fintoxicated with pricesi that tainted the economy several decades ago. But the alarms and the tatters of clothes non are justified “.

They affirm it Fabrizio Galimberti e Luca Paolazzi in an analysis on Firstonline.

According to the two economists, “the powerful structural factors continue to be underestimated – other than demand and costs – who keep a lid on prices. Factors ranging from globalization to immigration, from online sales to the thousand ways – many in place and many still in potential – that allow digital revolution to find cheaper ways to produce goods and services “.

“Long-term rates – continue Galimberti and Paolazzi – after various recovery tests in the last two months, have taken a more decisive rise.

An increase that appears historically modest, but which, after years of rates crushed to historic lows, it makes the markets nervous.

Behind this rise there are real news and fake news: the real ones concern the recovery that continues and the public deficits that accumulate; the false ones concern the possibility that price pressures worsen and become permanent “.

In Italy, lDragons effect remains: the spread, which had even pierced down to 100, remains around that round number (you have to go back 11 years to find a more favorable one).

The ECB reports that the increase in long-term yields is not suitable for a still weak economy; the means to counter this trend are in his possession, and we are waiting for words to be followed by deeds.

If nominal rates go up, real rates go down Europe and particularly in Italy, thanks to the increase in inflation, which is also influenced by one-off factors.

It should be noted that, for the first time since time immemorial, the real rates on BTp they have become negative.

“In America, where the increase in T-Bond yields was sharper, real rates have not fallen, but remain close to zero, if not below; which, with an American economy that is going to grow by 6% this year, represents a good assistance to this growth “.

“The stock markets – underline the two economists – remain at high levels, even if some tears (downwards and then upwards) betray a certain nervousness, in which they mix two factors: the feeling that too much has been done and that we are ripe for a correction, on the one hand; and, on the other hand, the aforementioned fears of a return of inflation with a consequent increase in rates that would lead to a much greater upheaval than the famous taper tantrum of 2013. The first factor is more serious than the second “.

“Also in this case – they conclude – making short-term forecasts on the stock markets is a game that is not worth the candle. The optimists will continue to trust the stock exchanges, the pessimists will increase the share of cash in the portfolio”.

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