For much of the time following the 2008 financial crisis, inflation has remained exceptionally low. Central banks have used aggressive and innovative policies, including negative interest rates, in an effort to lift inflation closer to targeted levels.
Now, the tide could be turning due to the Covid-19 crisis, according to Andreas Steno Larsen, Chief Global Strategist at Nordea Markets.
“The Covid-19 crisis has led to a political regime shift, and, for the first time in decades, we’re seeing a decent possibility of true inflation,” says Larsen, who recently kicked off this year’s Cash & Treasury Management conference with a presentation on the subject.
At the conference he boiled the inflationary regime shift down to five key factors – or what he calls the “5 Ds.”