Inflation
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.
Inflation, not valuation, is the real threat to this bull market. This four-report series lays out where BCA's strategists agree, where they don't, and what to watch for next.
August’s 0.3% increase in core CPI breaks inflation’s 3-month downtrend and is likely hot enough for the Fed to hike rates when it meets next week.
