BMO Capital Markets has indicated that the best-case scenario for stocks, often referred to as a "Goldilocks" economy, is becoming less likely. The bank cited sticky inflation and higher interest rates as key factors that could lead to a global policy-led slowdown. Mark McCormick, chief FX strategist at BMO, noted that overlapping headwinds, including China's economic slowdown and the divergent effects of AI and energy on different market sectors, are contributing to the breakdown of this scenario. The bank suggests that markets should prepare for a worldwide slowdown.
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