The S&P 500's 6.5% rout since last week suggests a 92% probability of recession, the bank says.
Treasury yields at decade highs are now tempting big money managers.
Central banks are expected to continue on a path of simultaneous monetary policy tightening.
Strategists warn that the best days may now be over for cheap-looking stocks.
Two new funds are focused on profiting from market volatility.
Big data surprises have caught a heavily hedged investor base off guard.
Market observers said it's too soon to predict how the Fed may react to the latest inflation data.
The bank's model said there was a 40% probability of U.S. recession, down from 50% in June.
The dip-buying urge is evaporating, being replaced by demand for hedges.
Jaw-dropping data on consumer price increases drew instant reaction across Wall Street.