How to Navigate a High Inflation Regime

Andrew Sheets and Lisa Shalett discuss whether current inflation is transitory or indicative of a new era of higher prices. Lisa Shalett outlines factors contributing to inflation from both demand and supply sides, including the global infrastructure boom, the K-shaped economy, and constraints on policymakers due to high debts and deficits. They also explore the impact of energy and technology, particularly the demands of generative AI and data centers on electricity costs and infrastructure. Lisa advises investors to consider adding real assets, infrastructure, energy transportation, commodities, and gold to their portfolios, noting that traditional 60-40 portfolios may be less effective in a high-inflation regime due to positive correlation between stocks and bonds. She also addresses the market's current benign long-term inflation expectations, suggesting they may be missing the risk of a structural shift.