Strategists Warn of Return to 1970s Stagflation Backdrop amid Rising Geopolitical Tensions
• Quantitative strategists warn of potential return to 1970s-style stagflation environment • See parallels today with geopolitical tensions, energy crises, shipping disruptions • Fiscal deficits also not on sustainable path, reminiscent of 1970s backdrop • In 1970s, stocks were flat while bonds significantly outperformed • If stagflation dynamics emerge, investors may rotate from equities to fixed income