It is not often that I take a very strong view that runs directly counter to the market consensus. On the rare occasions in the past that I have done so, it has been an uncomfortable feeling at first.
The question is whether my current scepticism over the consensus view of a “Goldilocks-like” scenario for markets of not-too-hot, not-too-cold conditions, moves from being an outlier to a baseline for economists and policymakers. The good thing on this one is that I will not mind if I end up being wrong as it would also mean a much lower risk of unnecessary economic and financial disruption.
As highlighted by a recent Bank of America survey, markets are currently dominated by a consensus based on three core hypotheses: durable high global growth; transitory inflation; and ever-friendly central banks.