is inflation a market risk 
inflation can contribute to market risk by impacting business performance consumer behavior and investor confidence monetary policy may be used to counter inflation through higher interest rates which can in turn lead to a recession causing the entire market to slow down this is different from inflationary risk or the possibility that the rising prices caused by inflation could outpace the returns from your investment inflationary risk is not a specific type of market risk because it doesn t impact the overall performance of financial markets however it is a type of investing risk diversification investing early to take advantage of compound interest and investing more aggressively when you are younger can all help minimize inflationary risk the bottom linemarket risk is the chance of incurring losses due to factors that affect the overall performance of financial markets events such as changes in interest rates geopolitical events or recessions can bring on what is known as the pain trade it is called systematic risk since it cannot be eliminated through diversification specific risk on the other hand is unique to a particular stock or industry sector and can be minimized through diversification market risk can be measured using methods such as the value at risk var method risk premium or beta coefficient 