Hodges believes only reason to invest along the lines of the inflation narrative, is if there is a change in market expectations that drives the level of inflation and the price of bonds upward.
“Inflation may go higher but it will not be sustainable until we have a longer-term conviction that nominal GDP growth in the US will reach a level like 4.5-5%,” he said.
“And the next quarter of GDP growth is going to be between 1.5% and 1.6% so that seems unlikely.”
