JP Morgan mulls corporate power, higher CPI, requires central banks re-start hiking cycle

<p>Summary points of an extended piece from JP Morgan Global Economic Research on the 'fate of the global expansion'.</p><ul><li>Global corporate profit gains slowed less than expected due to upside surprises to real GDP and inflation </li><li>While this resilience is supporting job and capex growth, underlying pressures on margins are building </li><li>Our key scenarios for the outlook can be viewed through the lens of the profit cycle </li><li>A "Boiling the frog" outturn sees profit pressures build as pricing power fades and wages squeeze margins… </li><li>…or pricing power remains with higher inflation that requires central banks to re-start the hiking cycle </li><li>A "Goldilocks" scenario requires either revenue gains to offset margin compression, or productivity growth</li></ul><p>I'm cheering on the final bullet point but suspect the "higher inflation that requires central banks to re-start the hiking cycle" is more likely. Sadly. </p>

This article was written by Eamonn Sheridan at www.forexlive.com.