Headwind: AI-Fueled Reflation Trap

AI productivity gains materialize at 2.5% annually but fuel wage inflation 50% above consensus
Monetary policy stays restrictive at 4-5% rates despite growth, diverging from soft-landing expectations
Fiscal deficits persist at 7%+ GDP, amplifying reflation via debt channels over 3+ years
Labor market frictions from automation double historical displacement rates

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