The US Isn't Fighting A Temporary Inflation Spike — It's Entering A 2-Year Mini-Cycle

For much of the past year, investors have operated under a simple assumption. Inflation is gradually cooling, the Federal Reserve will eventually pivot to rate cuts, and the economy will settle back into a familiar low-interest-rate environment.
Increasingly, the data is pointing in the opposite direction. A growing body of evidence suggests the U.S. is not dealing with a temporary inflation spike, but rather entering a reflationary mini-cycle.
In a Tuesday note, Bank of America (BofA) significantly raised its probability of such a scenario,  arguing that the cycle could persist through 2027 and potentially into 2028. The bank sees the middle stages of a multi-year expansionary cycle fueled by tariffs, manufacturing price pressures, and resilient domestic demand.
If that view proves correc