Tabula: Study reveals when professional investors expect inflation to come under control

Tabula: Study reveals when professional investors expect inflation to come under control

October 25, 2022

Inflation
Inflatie (02)

UK inflation hit a 40-year high of 10.1% in September and US inflation remained above 8% as energy and food prices kept prices higher. At the same time, the US 10-year breakeven rate, a measure of expected inflation over the next 10 years, is currently 2.5%. But new research by European ETF provider Tabula Investment Management Limited (“Tabula”) shows that just 40% of professional investors are ‘very concerned’ about inflation (please see the attached press release).

The majority of those surveyed (78%) expect US inflation to fall to the Federal Reserve target of 2% by 2024, while a surprising 65% of respondents see UK inflation falling to 2% in the next two years. Similarly, 70% of those asked suggested that Eurozone inflation would be 2% or lower within two years.

Table: Despite many inflation drivers being longer-term or structural, most investors see inflation coming under control within two years (data shows % of professional investors responding)

Inflation will return to 2%

In the US

In the Eurozone

In the UK

In the next six to 12 months

17%

22%

20%

In one to two years

61%

48%

45%

In two to four years

18%

18%

23%

In over four years’ time

4%

12%

12%

 

“Rising inflation and interest rates are major challenges for investors,” said Michael John Lytle, CEO of Tabula Investment Management.  “But the real concern is that many wealth and pension fund managers appear to be underestimating quite how sticky current inflation levels might be.”

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