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The surge in asset prices, including real estate and stocks, stems largely from expansive monetary policy, low interest rates, and wealth concentration at the top echelons of society. Notably, rising real estate prices have made homeownership less accessible for many, even as mortgage rates remain relatively low due to depressed yields.
The Impact of Post-Lockdown Spending and Commodity Markets
As economies emerge from pandemic restrictions, there's widespread anticipation of a demand rebound. Many households have accumulated savings during lockdowns, ready to be unleashed, potentially fueling sudden inflationary pressures if consumption spikes unexpectedly. For example, increased travel, entertainment, and hospitality spending can tighten supply chains, raising prices.