BCA Insights

Macro Investors Are About To Make A Huge Mistake | BCA Research

Written by BCA Insights | Apr 13, 2023 2:06:00 PM
US inflation is likely to fall significantly during the rest of the year, even as the unemployment rate remains near record-low levels. Equity investors will applaud this outcome because, to them, it will raise the odds of a soft landing. Unfortunately, such optimism is misplaced. As revealed by our kinked Phillips curve framework, a decline in inflation towards target will make a recession more imminent, not less imminent.