Markets Face an Even Bigger Inflation Test Next Year, Janus Says
- Services demand to spur labor costs, Janus fund manager says
- O’Connor adds markets face risk of decisive policy tightening
This article is for subscribers only.
Forget the goods supply-chain crisis threatening global risk assets: the real test comes next year when a service-sector boom drives labor costs higher and pressures central banks to tighten policy more decisively.
That’s the view of Paul O’Connor, head of multi-asset with Janus Henderson Investors, who argues that as economies open up in 2022, consumer demand for services will stretch already tight labor markets in the U.S. and elsewhere. That means any respite for markets from an easing in the current inflationary goods bottlenecks will be short-lived.