Saqib Iqbal Ahmad

NEW YORK, (Reuters) – Fears that the U.S. is headed into stagflation have been exaggerated by high-profile bond market investors Monday at the 2021 Milken Global Conference.

Stagflation, which is when low levels of economic activity are combined with high inflation, is extremely unlikely, said Emmanuel Roman (PIMCO Chief Executive) during a panel discussion that took place at the conference. It was held in Beverly Hills.

Other participants in the panel discussion – including PGIM CEO David Hunt; Invesco CEO Martin Flanagan; Elizabeth Burton, chief investment officer for the Employees’ Retirement System of Hawaii; and Scott Minerd, Guggenheim Partners global chief investment officer – largely agreed that the threat of stagflation was remote.

Numerous investors are starting to worry about the possibility that stagflation will occur in light of rising energy costs and the economic constraints of supply-chain gridlock.

Analysts at Goldman Sachs (NYSE) stated in a report earlier this month that stock performance has been affected by a stagflationary climate.

The S&P 500’s median real total return fell to negative 2.1% per quarter over stagflationary periods in the last 60 years, compared with an overall median real total return of 2.5% per quarter over that time period, the report said.

Flanagan of Invesco and other panel speakers believe that the likelihood of stagflation is unlikely due to the comparatively high U.S. economic growth.

Minerd of Guggenheim believes that the recent increase in inflation is temporary and said that the current interest rates environment favors stock valuations at their current levels.

Forward price-to earnings ratios for The are close to 20.

Are stocks expected to rise again? Minerd agreed. Do I believe stocks will be corrected now? It is not. No.

PGIM’s Hunt stated that investors have a greater chance of achieving better returns than Treasuries, despite them yielding little.

He said, “It’s never been harder to keep cash.”