Market Views: Which assets will perform best if inflation persists?

The news that US inflation had reached a 13-year high put pressure on equity and bond markets last week. The S&P 500 and Nasdaq fell 2.2% and 2.7% respectively on May 12, and the bond rout witnessed earlier this year appeared to resume. US consumer price data for April showed inflation in the 12 months leading up to April 2021 rose 4.2%, the fastest pace since 2008 and above the 3.6% forecasted by economists. The country's core inflation, which measures the price of goods and …