The prosperous market conditions of high growth and low inflation will soon have run its course, according to the chief investment officer at Alliance Bernstein.
“We are still bullish on equities, although ‘Goldilocks’ has aged pretty rapidly this year,” Mark Phelps, CIO of global concentrated equities at Alliance Bernstein, said in an email to CNBC on Friday.
The so-called “Goldilocks” market refers to an economy growing at just the right speed to support stock prices but not so strong as to trigger a significant uptick in inflation.
Speaking to CNBC’s “Squawk Box Europe” on Friday, Phelps said an increase in economic activity around the world since the start of 2018 had been a catalyst for stronger-than-anticipated corporate earnings growth. This could create a scenario in which the global economy starts “running too hot” for the central banks — thus prompting them to start hiking interest rates.