The US economy is in for rollercoaster inflation and could be headed for an ultra-rare ‘full employment recession,’ BlackRock says

• The economy is in for rollercoaster inflation that could hurt corporate profits, BlackRock strategists said.
• They pointed to conflicting inflation pressures in the US, with prices falling though wages are rising.
• Markets are in a new regime of volatility that could bring on a “full employment recession,” they added.

The economy could be in for chaos, as the US risks rollercoaster inflation and an unusual “full employment recession,” BlackRock warned.

Though inflation has eased significantly from its 41-year-high last summer, there are conflicting pressures in the economy that could potentially make prices volatile in the future, the asset manager said in a note on Monday. That’s because consumers are shifting their spending from goods to services, which is driving goods deflation. But at the same time, the labor market remains tight, which is driving wage inflation as workers push for higher pay.