After two years of rising inflation and interest rate increases, and with inflation seemingly settling at higher levels than what has been the norm for the past decade, investors are operating in a new environment. According to Cohen & Steer’s report, Infrastructure investing in the new economic paradigm, investors need to understand how the new inflation and interest rate environment will affect investment markets.
“We believe challenges in the new economic paradigm … prevent the rapid acceleration in economic activity usually seen in the early cycle recovery stage,” Cohen & Steers notes. “For instance, with little slack currently in the system, a sharp rebound in corporate profits appears unlikely.”
Rapid growth of past cycles may be more muted going forward and infrastructure investing, with its inflation fighting characteristics, could help portfolios maintain growth.
Cohen & Steers points out economists have consistently und