Blackrock:Central banks waking up to the tradeoffs between higher inflation and low growth

Blackrock's Investment Institute is out with its Q2 global outlook and I find their views to be always salient, though tilted towards the consensus.

Their main theme all year has been a regime where central banks can't have both low inflation and solid growth and they note that "central bank projections for higher inflation and slowing growth suggest they are waking up to this trade off now."

They highlight the quick pace of Fed hikes and the potential for economic damage and financial cracks.

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They continue to see a recession looming, which sounds like a push of a view that hasn't exactly unfolded as they thought it would to start the year.

One theme that Blackrock highlights that's not talked about often enough is the potential for a shift from the Bank of Japan and how that could ripple through global markets.

"Inflation near four-decade highs amid higher wages paves the way for the Bank of Japan to move away from its ultra- loose monetary policy. That could spur Japanese bond yields higher, potentially lifting other DM long-term yields too," they write.