BCA Research’s Global Investment Strategy team cut its tactical position in global equities to underweight on a three-month horizon, raising the probability of a U.S. recession over the next 12 months to 40%. The move follows a sharp negative shift in its MacroQuant model driven by geopolitical tensions that pushed oil into deep backwardation.

Inflation expectations have surged as one-year CPI swap rates rose by 70 basis points in the U.S. and 190 basis points in the U.K. since January. Analysts warn that each 10% increase in oil prices typically trims 0.1–0.2 percentage points from global growth and heightens the risk of enduring price pressures that could constrain central banks’ policy flexibility.

Sticky inflation and elevated energy costs threaten to squeeze Colgate-Palmolive’s profit margins by increasing manufacturing and transportation expenses. Consumer demand may be pressured if real incomes erode, prompting the company to consider further price adjustments, cost-cutting measures or supply-chain efficiency improvements to sustain margins amid a slowing global economy.