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the claim
Higher inflation increases stock market prices.
the verdict
CONTESTED PARTIAL
Recorded sources
1 source for · 5 against
Is it true that higher inflation increases stock market prices?
Partly. Most placed studies find higher inflation associated with lower stock prices or returns, including a 1983 study reporting a negative relation between stock returns and both expected and unexpected inflation and a 2025 Indian market study finding higher inflation dragged down the index. One 2025 Sub-Saharan Africa study reports a statistically significant positive association between inflation and stock prices, so the evidence is mixed and only partial.
Verdict: CONTESTED PARTIAL · 1 source for, 5 against · Last checked
Evidence for · 1
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Abdull-Baseet, A., Seif, M., & Komba, G. (2025). Impact of Macroeconomic Variables on Stock Market Prices in Sub-Saharan Africa. doi.org. https://doi.org/10.47941/ijhmnp.2466
Evidence against · 5
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Feldstein, M. (1978). Inflation and the Stock Market. nber.org. https://www.nber.org/papers/w0276
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More against · 4
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Kumar, D. P., Chauhan, D. S. S., Goel, S., Garg, D. R., & Chaudhary, D. S. (2026). Impact of Macroeconomic Indicators, Global Financial Events, and Monetary Policies on the Volatility and Performance of BSE Sensex: An Empirical Study of the Indian Stock Market. doi.org. https://doi.org/10.66635/ca6gqx83
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The Fiscal and Monetary Linkage between Stock Returns and Inflation. (n.d.). cir.nii.ac.jp. https://doi.org/10.1111/j.1540-6261.1983.tb03623.x
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Inflation and stock return volatility in selected African countries: A GARCH-MIDAS approach. (2023). doi.org. https://doi.org/10.1016/j.sciaf.2024.e02307
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Government Partisanship, Elections, and the Stock Market: Examining American and British Stock Returns, 1930–2000. (n.d.). cir.nii.ac.jp. https://doi.org/10.1111/j.1540-5907.2005.00155.x
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