> Can someone ELI5 why inflation causes the markets to go down rather than up? It's only going down relative to previous highs because institutional investors

> Can someone ELI5 why inflation causes the markets to go down rather than up? It's only going down relative to previous highs because institutional investors are expecting to be able to get better returns by lending instead of by investing in equity. The reason they expect to get better returns by lending is because they expect the FED to react to rising CPI by raising interest rates. > If there’s a market sell off due to inflation, where are those dollars going? Anything that returns more. Mostly towards lending to humans, businesses, funds, countries what have you. Maybe also towards commodities which are essential and people will continue to pay for them (oil, copper) Inflation hedges such as gold and more recently, crypto which is turning out to be an excellent hedge against US Dollar. All of this still sucks for anyone being payed in cash. We are all just puppets in financial games.