Weekly Commentary: Recession looms as regime takes root

Policymakers are recognizing a new macro regime but are ignoring the trade-off between inflation and growth. A resulting recession is bad news for risk assets. Stocks fell last week after hawkish comments by Fed Chair Jerome Powell and data showing another month of jobs gains. We see the Fed hiking through 2022. We expect the European Central Bank (ECB) to raise rates by 0.75% this week. We see it stopping well short of market projections in the face of recession.