BofA's Second Half Preview: Here Comes Stagflation

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by Tyler Durden
Friday, May 14, 2021 - 04:40 PM

It's a familiar theme from BofA Chief Investment Strategist, Michael Hartnett, who has been warning for the past 6 months about the inevitable advent of roaring inflation, which as even conventional wisdom knows has now arrived, and who today take score of where we are currently and where we are going.

But first looking back, Hartnett says that 2020 is when inflation & interest rates troughed, as last year marked a secular low point for inflation & interest rates as helicopter money, among various new central bank mandates, excess fiscal stimulus including Universal Basic Income, less globalization, fading deflation from the 3-Ds (disruption, demographics, debt) means that the 2% ceiling for US inflation over the past decade is the new floor and bond markets are adjusting. To wit: global interest rates are no longer at 5000-year lows.