Why the “high for longer” narrative is flawed

The market view on growth has undergone a furious transformation this year. In January, we were bracing ourselves for a hard landing. Then we were told to expect a soft landing. Now there is talk of “no landing”—i.e., that for growth to slow to a level that allows inflation to return to the 2% target, the core central banks must tighten further. Nikolaj Schmidt disagrees: he argues that the original hard landing narrative remains the correct one, and central banks will need to ease sooner rather than later.