Equity investors should brace themselves to walk the tightrope between "stagflation" and "reflation," according to Peter Oppenheimer, the chief global equities strategist at Goldman Sachs.
"At these current very, very low levels of interest rates, inflation expectations and growth, there is a very fine line between tipping into a stagflationary type of environment as there is the opportunity for being in a reflationary environment," he told CNBC on Wednesday.
"Stagflation" is a term used to describe relatively low levels of economic growth combined with high inflation levels which, Oppenheimer argued, could result in a headache for investors. Reflation relates to stimulating an economy that has just suffered a dip in the business cycle, and Oppenheimer believes that the global economy looks poised to enter one of these two scenarios.
Echoing his previous comments from earlier in the year, he said that equity markets had been stuck in a relatively flat state with a wide trading range, he described current profit opportunities as "pretty neutral."