Will Aging Populations Drive Inflation?WillAgingPopulationsDriveInflation?

With inflation holding near elevated levels, the Federal Reserve may have the ammunition it needs to maintain its aggressiveness in tightening policy – and potentially keep rates higher for longer. A competitive job market and higher wages contributed to the rapid rise in inflation during the pandemic, and today, the US labor force participation rate remains below its pre-COVID levels. Demographic changes could make tight labor markets a lasting characteristic of the global economy. Most of the world’s biggest economies are home to an aging citizenry, while their populations are growing at a slower rate overall. These trends have the potential to alter market dynamics in the decades to come.

In the Season 3 premiere of The OUTThinking Investor, PGIM Fixed Income’s Katharine Neiss and the London School of Economics’ Charles Goodhart, author of The Great Demographic Reversal, explore the possible inflationary effects of demographic changes, the implications for monetary and fiscal policy, and how aging populations could reshape the global investment landscape.