Fidelity International Warns Structural Inflation Will Persist Globally

Fidelity International warns that structural inflation is reshaping global markets and is likely to persist rather than be a short-lived phenomenon. The investment solutions provider suggests that central bankers may have declared a premature victory in the fight against inflation, citing government deficits, AI investments, low unemployment, trade barriers, and energy disruptions as primary drivers of the trend.

To mitigate these risks, the firm recommends diversifying into stocks with inflation-linked profit streams. Fidelity specifically highlights bank equities, noting a striking improvement in Japanese bank profitability, and companies benefiting from AI-driven scarcity. Recommended sectors include technology firms in South Korea, Taiwan, and onshore China, as well as power supply businesses in the United States, Europe, and Japan.

Additionally, the firm suggests gold as a store of value and recommends specific metals and mining companies that are critical to electrification efforts.