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@jawburns

Absolutely it would increase the popularity of BNPL. It would also increase the risk of bad debts and cost of capital as interest rates increase to curb inflation.

Not sure if you're familiar with the Discounted Cash flow valuation method. Essential you apply a discount to future cash flow to create the valuation. The discount is based on inflation. Growth stocks have low cash flow or none at all. These companies are expected to produce a lot of cash flow but it's not for a long time into the future. The further into the future the lower the value of the cash flow, hence the lower the valuation.

My argument is that inflation will peak in 2022 and come back down as supply constraints subside. The supply constraints have been a temporary issue due to covid and consumption hasn't actually increased because of demand. The Fed and RBA will begin to pull back QE but rate rises won't be required yet. The risk for the RBA and Fed raising rates too soon is that they could cripple the economic growth/recovery. This happened during the great depression (1928 and 1929). Interest rates were increased to slow down the sharp increase in stock prices like we're seeing now. The problem was, these interest rate increases affected vehicle purchases and construction and as a result slowed down economic recovery. Given that growth stocks have pulled back purely on the talk of interest rate increases is a sign that the need to raise interest rates won't be required. Inflation will remain until supply is returned to normal. Pulling back on QE will reduce the risk of hyperinflation and is a far more likely scenario under the current conditions imo. That's why I believe there's more upside for growth stocks unlike the market is currently pricing.