Ben Carlson, Columnist

Inflation Is a Bigger Danger to Stocks Than Rising Rates

Rising prices have a stronger relationship with poor market outcomes.

February 22, 2018 at 10:00 AM UTC

Ben Carlson is director of institutional asset management at Ritholtz Wealth Management. He is the author of "Organizational Alpha: How to Add Value in Institutional Asset Management."

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Investors tend to attach narratives after events like the recent bout of market volatility as a way to provide comfort in the face of market uncertainty and losses.

Although there could be any number of causes for the downturn, recent data on an uptick in inflation and rising interest rates are two of the stories that have gained ground. Both can play a role in shaping market expectations, but one, inflation, has a stronger relationship with poor market outcomes.