Ocean Park CIO urges caution as falling correlations meet lingering inflation risks
In a recent Bloomberg article, “Trump Threats, Fed Feuds Fail to Break Markets as Logic Prevails,” Denitsa Tsekova spoke with CIO James St. Aubin, exploring why markets are showing remarkable resilience despite political noise, tariff threats, and central bank infighting.
James offers a note of caution for investors: “I would not get too comfortable with idea that inflation fears are gone for good. Higher inflation generally increases correlation, as it is the ‘enemy’ of most asset classes,” James says. “A fear of stagflation is really the outlook that creates high correlation between stocks and bonds.”
His point is clear: when markets appear to make sense again, that’s exactly when investors should be sharpening their risk radar.
The thoughts and opinions expressed in the article are solely those of the person speaking as of 7/18/2025, and are provided for informational purposes only. Any opinion or estimate contained in this article is made on a general basis and is not to be relied upon by the reader as advice. The reader must make his/her own assessment of the relevance, accuracy, and adequacy of the information contained in this article, and make such independent investigations as he/she may consider necessary or appropriate for the purpose of such assessment.
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