Fear of Inflation Is Scaring Markets, Says Cathie Wood

The video discusses the fear of inflation and rising interest rates affecting financial markets, with a focus on deflation risks. It highlights the impact of rent and gasoline price increases on lower-income earners and the decline in consumer sentiment. The speaker argues that businesses are overcompensating for past consumption gaps, leading to potential cyclical deflation. Innovation, particularly in AI, is seen as inherently deflationary, with various technologies converging to disrupt traditional markets. The video also addresses the challenges faced by companies that prioritize short-term gains over innovation, leading to negative deflationary impacts.

What role does innovation play in the context of deflation according to the speaker?

What are the potential consequences for companies that prioritize short-term profits over innovation?