Asset Allocation Committee Outlook 1Q19

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Fundamental Laws

The proportion of asset classes that ended 2018 in the red was unprecedented, driven by two structural transitions: from quantitative easing to quantitative tightening, and from a globally synchronized to a multi-cycle growth dynamic. In 2019, we expect the Federal Reserve to ease the U.S. into a “soft landing” and believe China’s renewed stimulus could support recovery in the rest of the world. We still expect QE to become QT and political risks to persist, but we think this global re-convergence can lead to market outcomes that are more positive—and more diverse—than last year’s.