The text opens a discussion around the expectation of financial markets for headline inflation rates to drop significantly towards central bank targets over the next couple of years, maintaining stable inflation expectations in the medium to long term. However, the
The text above explores the market's belief in the normalization of inflation rates in the medium to long term. Markets seem to be downplaying the possibility of a higher-inflation regime caused by structural fiscal policy loosening, a shift in workers'
The theme of the text pertains to current asset allocation decisions amidst a less optimistic economic outlook. The author maintains a preference for fixed income over equities, largely due to anticipated headwinds for corporate earnings and margins from higher interest
The article primarily discusses an impending shift in the global liquidity cycle and its potential implications for the economy. It mentions the recent liquidity crisis in the US banking sector and the consequent liquidity injections, as well as the Swiss
Uncertainty is the dominant theme in the equity market landscape of April 2023. Despite the anticipated end of the Federal Reserve's hiking cycle, the report underscores that this focus might miss the real picture. The Fed hikes are, in essence,
The text outlines a pragmatic approach to global asset allocation, given the prevailing economic conditions. It delves into the intricacies of economic forecasts influenced by central banks' tightening, potential banking crises, and geopolitical tensions. A slowdown in growth and continued
In this insightful piece by Aegon Asset Management, titled "Macro musings: The US Federal Reserve is caught between Scylla and Charybdis," the author discusses the Federal Reserve's precarious position in handling the trade-off between hiking interest rates to curb inflation
The piece provides an in-depth analysis of the shifting dynamics in the fixed income landscape. It highlights the dramatic shift from a low-yield environment, influenced by the predictable accommodative nature of central banks, to an era of higher expected inflation
Capital Market Assumptions March 2023 The text revolves around the exploration of asset allocation strategies against the backdrop of climate, social and geopolitical disruptions. The author highlights the consequences of the Ukraine conflict on the global energy supply and inflation,
The main theme of this text revolves around the anticipation of a potential recession, its implications for investors, and the heightened significance of focusing on fundamentals. The author discusses the list of concerns investors faced even before the Silicon Valley
What the ‘next normal’ means for fixed income: reimagining core bonds That the ‘next normal’ means for fixed income: reimagining core bonds This article explores the “next normal” for fixed income investments in the post-COVID world. After a long period
"Bank of England: First to hike, last to pause and pivot" assesses the recent interest rate hike by the Bank of England and its subsequent challenges. The article highlights the UK's higher-than-expected inflation rate, attributing it to various factors like
The report "Asset Class Returns Forecasts Q2 2023" discusses the effects of rapid Quantitative Tightening (QT) by Developed Market (DM) central banks. It suggests that the impact is evident across price dynamics and financial stability. However, core measures of price
As we journey into 2023, the global macroeconomic landscape exhibits marked differences from prior years. A decade of easy monetary policy, enabled by low and stable inflation, gave way to 2022's unprecedented monetary tightening, as central banks raised interest rates
As the economic growth outlook brightens, investors are turning their attention to uncertainties in US and European financials, financial vulnerabilities, and persistent inflation. Central banks face a complex task in maintaining both financial stability and price stability. In response to
The month of March 2023 has been characterized by significant volatility in equities and bond markets, triggered by troubles in US and European banks, which have led to a resurgence of macroeconomic uncertainty. This situation has seen a temporary resurgence
Q2 2023 Global Market Outlook Full Report The text highlights the current economic landscape, characterized by resilient growth, slowly receding inflation, and continued monetary tightening by central banks. This creates a favorable environment for government bonds and uncertainty for equity
The recent banking crises in the US and Switzerland have sparked concerns about the stability of the global financial system. However, these crises are unlikely to pose a broader threat. Despite this, lending standards are anticipated to tighten and inflation
The main theme of the text is the greening of the European Central Bank's (ECB) balance sheet as it integrates climate considerations into its monetary policy. Since October, the ECB has been redirecting corporate bond purchases towards issuers with better
The main theme of the text revolves around global trade recession, electric car pricing, German household savings, and German foreign direct investment (FDI) in Africa. The focus then shifts to policy rate decisions in the US and Eurozone amid inflation
The main theme of the text revolves around the recent banking crisis and the challenges faced due to policy tightening. The author highlights the Fed's response to regional bank failures, providing liquidity provisions to protect depositors and prevent widespread economic
In this short essay, we discuss the main theme of "A global assessment of the implications of recent banking sector developments." The text primarily focuses on the impact of recent banking sector developments on the global economy and central banks.
The discussion in "Macro musings: The Fed, payrolls, and what to make of it all" revolves around the Federal Reserve's decision to hike rates, the effect on market pricing, and the potential scenarios that might prompt a change. While the
The main theme of AXA Investment Management's "What you know and what you must guess" is the exploration of Central Bank Digital Currencies (CBDCs) as a compromise between the technical benefits of cryptocurrencies and the mitigation of financial stability risks.
The latest data on inflation has led to concerns about the economy, with some fearing that hot inflation and economic data could lead to an increased chance of recession, even if it takes longer than first expected. The Federal Reserve
After spending over a decade trying to generate inflation, central banks are today confronted with the highest increases in prices since the 1970s. The return of inflation brings with it an unwelcome dilemma; combat inflation or prioritise financial stability. At
A few months ago, Edmond de Rothschild predicted a disinflation trend and a modest recession. The author initially observed signs of wage moderation in the US and a promising disinflation trajectory. However, recent data has revealed a recovery in western economies,
AXA Investment Managers' report, "The Pitfalls of the Inflation Blame Game," critically examines the European Central Bank's (ECB) emphasis on profit margins as the main factor driving persistent inflation. The report acknowledges the acceleration of core inflation in the Euro
In the research paper titled "Spring Economic Outlook," the author from Allianz discusses the impact of negative confidence effects from the near-death experience in the US banking sector and the unresolved energy situation in Europe on the global economy. The
The sudden collapse of Silicon Valley Bank and Signature Bank raised concerns about the investment outlook, highlighting three major problems. Firstly, the banks had a narrow depositor base with a large percentage of uninsured deposits, which was concentrated in troubled
The Federal Open Market Committee (FOMC) meeting held in March 2023 included projections of the most likely outcomes for real GDP growth, the unemployment rate, and inflation. Each participant's projections were based on their assessment of appropriate monetary policy and
The State Bank of Vietnam recently cut its benchmark rate by 100 basis points, dropping from 4.5% to 3.5%. Catherine Reichlin examines the implications of this move in her Bond Moment report. Although Vietnam already had low rates compared to
Rate Hike and Banking Sector Stability. In a widely anticipated move, the US Federal Open Market Committee (FOMC) increased rates by 25 basis points, despite recent upheaval in the banking sector. The FOMC stated that the US banking system is
Global growth remains resilient, but the tightening of central bank policies is expected to impact economic growth and earnings outlook in the latter half of the year. The US Federal Reserve and other central banks are hawkish due to services
The post-Covid rally in global private equity came to a halt in 2022, with the Federal Reserve's move to raise interest rates being a key factor. The rate increases sparked concerns about persistent inflation and fueled speculation about recession, causing
According to Lael Brainard, the Vice Chair of the Board of Governors of the Federal Reserve System, recent experience with the pandemic and Russia's war against Ukraine has highlighted the challenges for monetary policy in responding to a series of
The year 2022 has been one of unpredictability and volatility for the global banking industry. The shocks to the system, including geopolitical instability and the lingering effects of the COVID-19 pandemic, have resulted in a poor outlook for global banking
This is a summary of the “Quarterly macro and market insights” report from Capital Group’s fixed income team. The report indicates that the outlook for bonds remains positive despite concerns about global growth. The global economy is expected to weaken
Market reactions to the ongoing banking turmoil resulted in a significant downward revision of expectations for the policy rate of both the Federal Reserve and the European Central Bank (ECB). The market expressed its skepticism regarding the central banks' ability
Inflationary pressures mean monetary policy must be tighter and more restrictive than it has been in the recent past. Higher for longer interest rates will be an important feature of a new regime in policy and market behaviour. The global
Central Bank of Ireland Quarterly Bulletin reveals gradual recovery of Irish economy amidst easing inflationary pressures and uncertainty over future path of inflation and public finances. According to the Quarterly Bulletin released by the Central Bank of Ireland, the country's
This report discusses how the tightening of monetary policy and inflation have affected fixed-income markets and business models, leading to tighter financial conditions that are likely to continue. The report also explores potential areas of strain for investors, such as
March 2023 2022 was certainly a tumultuous time for investors. The year was dominated by the Federal Reserve’s actions to fight inflation, particularly given the widespread perception earlier in the year that it was behind the curve. US Core inflation stood
As it has been clearly communicated by ECB policymakers in recent weeks, the central bank will hike by 50bp in its March meeting, taking its main refinancing rate to 3.5%. Moreover, President Lagarde will likely signal another large hike in
The US authorities took out the “big guns” and acted decisively before the market open to contain the spill over effect from the demise of SVB (now accompanied by Signature Bank) using a two-pronged approach. First, they will “make good”
The February inflation data vindicates the European Central Bank (ECB) hawks. We remain however concerned with the “financial channel”: the January batch for loans confirms the credit impulse in deeply negative. We look at Sweden and the UK as “canaries
A more diverse – and robust – market Over the past three decades the gold market has undergone extraordinary change. The structure and dynamics of demand and supply are vastly different from those of thirty years ago. Yet amid this
Global Asset Allocation: The View From Europe After outpacing the rest of the world by more than 170% over the past nine years between 2013 and 2021, US equity markets notably lagged the rest of the world last year. Despite
Global tactical asset allocation views brief After a weak 2022, the grass seemed a lot greener at the start of 2023, with equity and bond markets roaring back strongly. The optimism was fueled by a continuation of weaker headline inflation
BIS Bulletin 67 Key takeaways The strength of the link between money growth and inflation depends on the inflation regime: it is one-to-one when inflation is high and virtually non-existent when it is low. A link can also be seen
