Following the recent dramatic one-day selloff, many investors are concerned about the possibility of a large market correction. Jurrien Timmer, Director of Global Macro, joins us to discuss the recent style rotation and possible counter-rotation, and his thoughts on the monetary policy and inflation debate. While the market is relatively calm, things are still moving quickly as the S&P 500 keeps climbing to new all-time highs each week. Jurrien sees lots of movement through the style boxes. He says value and small caps lead in the early cycle phase, but now that we’re in the earnings phase, growth has taken the lead. Jurrien believes that rates should be higher, but the Fed has kept rates lower. With higher rates, growth should be depleting, and value should outperform, but we see the opposite. Jurrien also believes that inflation will be transitory and that the rate of change will decrease, but the question is how much it will actually decrease. Follow along with Jurrien’s charts on Twitter: @TimmerFidelity.

Recorded on July 26, 2021.