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Fiscal stimulus and the vaccine have fuelled an extraordinary rally in equities but ultimately stocks are at record highs because of extraordinarily low market interest rates. This means that for investors, the decision between cash and equities or between sectors hinges on the rates outlook. Even though there are forces keeping rates low, it would be complacent to assume away the risks of higher rates because the inflation outlook is more uncertain than usual at the moment. It would be back to the drawing board for investors if inflation pressures structurally rise, because the Federal Reserve put will be kaput and portfolios would need a radical overhaul. Investors should be wary of inflation – but also of being underweight equities.