🇺🇸🔺A Second Round Of High Inflation Could Peak In 2027: Cable FX Macro

• The chart below compares the actual U.S. headline CPI to the high-inflation cycle of the 1970s. In recent months, we have seen prices coming above economists' expectations. Forecasts can live through periods of mismatch but the fact that inflation is re-accelerating brings this chart into play

• If we were to live a second round of inflation similar to the one in the 1970s, we could see prices accelerating into 2026. This would send U.S. inflation to tick into double digits

• Again, following the prior episode of high inflation, prices wouldn't settle down until 2H 2027. If this is to materialize, then forget about "higher for longer", we would see a fresh round of central bank tightening, something risk assets have not priced in