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The week's question
In December 2024, in the thread "Re: BRK: Why Not XOM?", BreckHutHigh asked the members: "What about the long road trips with kids?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Personal Finance / Macroeconomic Trends & Risks
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Author: WendyBG ✶x2☼🐝  😊 😞
Number: of 4460 
Subject: Re: Trump's pro-inflation aggression
Date: 08/28/25 10:58 AM
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UpNorthJoe asked, "How do stocks do in stagflation ? "

Let's take a look at the nominal and inflation-adjusted S&P500 between 1970 and 1980.

multpl.com - S p historical prices

multpl.com - Inflation adjusted s p

The nominal S&P500 stagnated between 1970 and 1980 but the inflation-adjusted value fell.

Let's look at the 10 Year Treasury bond.

St. Louis Fed (FRED): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity, Quoted on an Investment Basis (DGS10) | FRED
St. Louis Fed (FRED): 10-Year Real Interest Rate (REAINTRATREARAT10Y) | FRED

The real yield of the 10 YT was always positive because the bond market vigilantes required a positive yield over inflation. This was true until the Federal Reserve's QE after the Great Financial Crisis.

There was no such thing as a TIPS in the 1970s but nowadays TIPS are guaranteed to yield over the rate of inflation.
Wendy
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