Key points
- Historically a supportive backdrop for shares, with stable bonds.
- 2017 is a commonly cited recent example.
- Rare and hard to sustain for long.
Example
If growth runs near 2.5%, inflation holds near 2% and the central bank has no need to raise rates, shares have historically tended to do well.
In history
The late 1990s are a textbook example: US growth around 4%, inflation mostly between 1.5% and 3%, and the S&P 500 roughly tripled between 1995 and 1999.
Related terms