Mark Capleton
Showing 1–3 of 3 transcripts.
- Bank of America22 min
Inflation and the inflation markets
Mark Capleton, Stephen Juneau, Alessandro Infelise-Zhou, Meghan Swiber
Strategists attribute the current surge in US inflation to Iran-related energy shocks, supply chain pressures, and AI-driven capital expenditure, while noting weaker fiscal stimulus compared to the pandemic era has kept demand-side inflation subdued. Although the Federal Reserve is likely to hold rates until labor market signals improve, forecasts now suggest a first 50-basis-point cut will not occur until the second half of 2026, whereas the Euro Area and UK anticipate earlier ECB rate hikes in mid-2025 followed by a slower cut cycle starting in 2027. Market positioning has shifted to short duration and long risk assets despite underpriced tail risks from prolonged conflict, as five-year inflation expectations remain anchored and European real rates continue to support a bullish bond stance.
- Bank of America17 min
Policy Derby: Rates for the Roses
Mark Cabana, Ralph Axel, Katie, Mark Capleton, Yamada, Ivan, Ronald Man
Recent central bank communications from the Federal Reserve, ECB, Bank of Canada, and Bank of England have shifted global rate expectations toward potential increases or prolonged tightening driven by persistent inflation and oil prices. BofA strategists analyze these diverging stances to forecast bear flattening or steepening curves, while warning that fiscal risks and liquidity dynamics in the US Treasury market may further impact asset valuations. Ultimately, the analysis suggests a complex interplay where hawkish signals from the Fed and BoC contrast with dovish adjustments in the UK, creating volatility for sovereign yields and foreign exchange interventions.
- Bank of America15 min
Inflation markets
Ralf Preusser, Mark Capleton, Meghan Swiber
Analysts examine the $4 trillion inflation-linked bond market to highlight how fiscal constraints in the UK and Eurozone have created supply scarcity while instrument mechanics drive persistent basis disparities between swaps and cash markets. Despite theoretical stagflation models predicting lower real yields, current data shows a market anomaly where US real yields have risen alongside compressed long-term inflation expectations. Consequently, investors are advised to fade the recent spike in short-term real yields, as this pricing disconnect challenges the Federal Reserve's dual mandate without indicating an immediate risk of unanchored inflation expectations.