Inflation Threat

By: Macro Strategy Team

February 2, 2026

By: Macro Strategy Team

Macro Strategy Team

Chair Powell characterized the current inflation situation as being distorted by the inflationary impact of new tariffs, while expressing confidence that the Fed will bring inflation back to the 2% goal.

It may be the case of Lucy pulling the football away. The graph shows the average z-score of copper, aluminium, lead, tin and nickel. Based on a long history, the surging z-score suggests upside risk to US 5-year breakeven rates.

There is an old adage that states when the Fed becomes more complacent about the inflation outlook it is time to worry.

Author Bios

Macro Strategy Team

The Macro Strategy team provides cross-asset research and market intelligence across developed and emerging economies. Their expertise in FX, equities, and fixed income is complemented by proprietary indicators on investor behavior, inflation, and sentiment—turning complex data into actionable insights that help clients anticipate risks and capture opportunities.

1. Peter L. Bernstein Award for Best Article in an Institutional Investor Journal in 2013; Bernstein-Fabozzi/Jacobs-Levy Award for Outstanding Article in the Journal of Portfolio Management in 2006, 2009, 2011, 2013 (2), 2014, 2015, 2016, 2021; Graham & Dodd Scroll Award for article in the Financial Analysts Journal in 2002 and 2010. Roger F. Murray First Prize for Research Presented at the Q Group Conference in 2012, 2021, 2023. Harry M. Markowitz Award for Best Paper in the Journal of Investment Management in 2022, 2023. Doriot Award for Best Private Equity Research Paper in 2022.