Inequality to drive 'massive policy shift,' BofA's Michael Hartnett says

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Rising income inequality and a deflationary global economic picture are going to lead to big changes in 2016, according to one Wall Street forecast.

Quantitative easing and zero interest rates are on their way out in the U.S., and Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, believes they will be replaced with massive infrastructure spending.

The result would benefit Main Street more than Wall Street, which has had a banner seven-year run helped by historically easy Federal Reserve monetary policy.

"If the secular reality of deflation and inequality is intensified by recession and rising unemployment, investors should expect a massive policy shift in 2016," Hartnett said in a note to clients. "Seven years after the West went 'all-in' on QE and ZIRP, the U.S./Japan/Europe would shift toward fiscal stimulus via government spending on infrastructure or more aggressive income redistribution."

A reversal in trend would have a substantial impact on investing.