The Chairman of UBS Global Asset Management sees inflation as a key risk during what he describes as a remarkably experimental time

The Chairman of UBS Global Asset Management sees inflation as a key risk during what he describes as a remarkably experimental time. John Fraser said he was concerned that many central banks had become too concerned with the broader objective of boosting economic growth rather than focusing on inflation and financial stability. Fraser believes the sustained period of monetary expansion builds up the preconditions for a significant increase in inflation. Fraser says, if you do believe inflation poses a risk you need to look asset allocation from a defensive standpoint. Blue-chip equities, where there is pricing power, provide some protection if inflation takes off. Equally, staying short in the fixed-income market so that when interest rates do rise as monetary authorities respond to inflation, you are in a position to take advantage in the bond market. Read more (VIEW LINK)