BofA Global Economic Weekly: Hiking Cycles Everywhere
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Bank of America's global economic weekly examines an environment in which central-bank hiking cycles have become widespread. A central exhibit is the 'magic 5% line': when nominal spending growth runs above 5%, core inflation tends to overshoot, framing why policymakers have kept tightening. Activity indicators, the note shows, have now shifted to become a source of added vulnerability rather than support, signalling momentum risks alongside still-elevated price pressures. Financing conditions are another focus: the funding gap has widened slightly, a modest headline move that masks a clear divergence between large enterprises and small and medium-sized firms, implying uneven transmission of tighter credit. The report rounds out the analysis with its standard forecast apparatus — tables of economic forecasts, global economic forecasts (continued) and quarterly forecasts — giving readers the house view across countries and horizons. Together the exhibits link above-trend nominal spending, softening activity and fragmented financing conditions to a global rates backdrop dominated by central banks in tightening mode.
Key exhibits
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