Quants worry inflation risks could sink stocks

Research from ex-BoE official Sushil Wadhwani shows stocks may struggle when inflation is high

Dollar balloon

A former central bank official turned buy-side quant is warning investors not to get carried away with the stock market boom.

Sushil Wadhwani, who sat on the Bank of England Monetary Policy Committee from 1999 to 2002, said equities could take a hit if inflation ticks higher in the coming years. That depends on how central banks respond as Covid-battered economies begin to recover. If they act too slowly and prices run out of control, equities are likely to leave investors disappointed, he said

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