If everyone thinks there will be tightening, there will be no tightening
I read today's Bank of America's Flow Show report...
And was quite staggered at something.
Firstly, I am unsure as to why Michael Harnett deems inflation to be permanent based on those numbers (I mean, no mention of base effects, which although a meme now, still have a hell of a lot of merit when discussing the topic).
Secondly, markets are forward looking...
If the thesis here is that a market crash will lead to central banks not tightening, then I think it's possibly more prudent to say that the expectations from the market that central banks will tighten will
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