Latest from BCA Research
Central banks have begun a mild tightening cycle as elevated energy prices raise concerns about second-round inflation effects. We use BCA’s Central Bank Monitors to test whether hawkish market pricing is justified and identify tactical opportunities across global bond and currency markets.
The Fed hiked rates last week, but Fed officials expect this tightening cycle will involve no more than three 25-basis point hikes, contingent on inflation coming down quickly in 2027. We’re inclined to agree.
Labor supply is not meaningfully boosting inflation today, but the net exit of unauthorized immigrants has lowered the bar for stronger labor demand to turn inflationary. Hawkish monetary policy surprises over the coming year are possible.
Recent oil market developments expose the limits of the adjustment mechanisms that have cushioned the global market since the Hormuz closure began. Fortunately, Hormuz dark transits have become the dominant shock absorber in recent months, and rising flows should help mitigate the latest supply disruption going forward.
The Fed is unanimous in expecting a mild tightening cycle of no more than 75 bps, but that outcome is contingent on a rapid drop in core inflation in 2027.
In this screener report, we explore opportunities in duration-resilient large-cap Technology, emerging defense technology, and a conditional entry point into copper.
Concerns by the major AI companies that they are locked into a financially unsustainable arms race for AI dominance are likely playing as much a role in their newfound “go slow” approach as concerns over AI doom.