The basis of the relationship of inflation expectations and the stock market

Inflationary behavior is a consequence of inflationary expectations of subjects, which is expressed in an increase in demand at the present time, which, in turn, leads to an increase in prices for goods and services. By spending more now, consumers reduce their savings, investment in the economy, which in turn has a strong impact on the stock market. Agents need money at the current time, which leads to an increase in supply in the stock market and its general decrease. This paper shows that one of the main factors affecting the stock market is not inflation itself, but the agents' inflation expectations.