BlackRock’s Li Says Medium-Term Inflation Is Underappreciated

The video discusses market dynamics in the near and medium term, focusing on inflation expectations. In the near term, there is significant uncertainty due to reopening dynamics, leading to potential inflation overshooting the Fed's targets. In the medium term, inflation is expected to gradually increase, driven by shifts in supply chain focus and high debt levels. The video suggests that medium-term inflation is underappreciated by markets, and interest rates may not rise significantly due to high debt servicing costs.

What impact do high debt levels have on inflation and interest rates?

Why is medium term inflation considered underappreciated by markets?