Inflation is now a real risk for investors

IN the first quarter of this year, there was turmoil in the financial markets due to concerns about rising inflation, but the discussion focused on demand-side inflation. My assessment of the primary reason for the immediate rise in inflation is that it is due to a lack of supply and, thus, not an inflation driven by demand due to overheated economies. There is a difference between the two forms of inflation and, unfortunately, supply-side inflation is not the best news for the financial markets and investors.

The price of a barrel of oil has now reached a level that has led governments in several countries to assess that the price has become too high and that is even before the heating season has really begun in the northern hemisphere. It is worth noting that several countries, led by the United States, opened-up some of the national oil reserves this week, which is a real intervention in the oil market.