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Forecasts Quarter 1 2023

Chief Economist
Portfolio Manager

Global Economic Outlook

  • Global growth will slow into 2023, with US and European growth not much above zero. Risks are to the downside with sub-trend growth extending into 2024.
  • Amid improved supply and slowing demand, a powerful disinflationary episode takes hold. More favorable inflation data could see the Fed cut interest rates late this year.

Emerging Markets Outlook

  • Amid lowing global demand and constricting monetary policy, the economic backdrop for emerging markets (EM) remains difficult.
  • China’s reopening should boost EM growth performance, but risks remain.

Global Capital Markets

  • Financial market oriented signals point to an improving backdrop for capital markets just as economic growth in advanced economies is poised to straddle weak or recessionary conditions — leading to a tenuous balance of risks.
  • Bond markets present opportunities across geographies, maturities and sectors. We prefer allocations to cash and government bonds (US and non-US) to take advantage of current carry and defend against slowing economic growth.

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