Key points
- Four regimes: Goldilocks, Reflationary Boom, Stagflation, Deflationary Bust.
- Which assets do best has varied a lot between regimes.
- Shifts between regimes have driven some of the biggest market moves.
Example
A shift from a Deflationary Bust (falling growth and inflation) to recovery has typically seen shares beat government bonds.
In history
The regime moved from reflation in 2021 to stagflation-like conditions in 2022, when growth shares fell much further than value shares.
Related terms