What is the probability of a Repeat?

Inflation numbers ticked back up (PCE for July) and the consensus is that "sticky" inflation will be around for awhile. This would make it hard to return to the zero interest rate policy (ZIRP) that has been dominant since the GFC. And that makes it all the more strange markets rally on bad news as if such a return trip is imminent. But I digress.

We cannot deny that a return to ZIRP is possible, maybe even probable. We should be prudent and NOT dismiss possibilities even if they seem to have low probabilities. Indeed, low probability events happen all the time, and even more so with global markets as it is INCREDIBLY DIFFICULT to assign probabilities given their complex and dynamic nature.

So let's keep our mind open and our forecasting simple.

Forward Outcome 1: New Expansion - Return to ZIRP, debt increases with no accountability, technology innovation, no recession, Fed constant support, etc.

Forward Outcome 2: Range Bound - Sticky inflation, Fed supportive but with limits, higher rates, recession, markets up and down, etc.

Forward Outcome 3: The End - alien attack, asteroid strike, Earth poles re-align, super-volcano erupts, you get the picture.

Markets go through expansions then ranges. Maybe this expansion has more to go. My view is Outcome 2 and we will likely see some repeat of the 1970s vs. a repeat of the 2010s. And we will likely need to manage high(er) inflation, low growth, and a (deep?) recession just like then.

I understand why commodities outperformed then, but I just don't know if the retreat in demand from Covid highs offset commodity tailwinds from inflation and geopolitical tensions. I would be careful of such a guidebook.