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Forecasts Quarter 3, 2023

Chief Economist
Portfolio Manager

Global Economic Outlook

  • Major central banks continue to send hawkish messages amid above-target inflation and macro resilience.
  • But resilience is not immunity. The demand-dampening impact of high borrowing costs, the disappointing Chinese recovery, and deteriorating credit quality are vulnerabilities to watch.

Emerging Markets Outlook

  • China’s challenging growth outlook weighs on EM growth expectations.
  • As disinflation broadens, central banks start positioning for calibrating policy rates lower.

Global Capital Markets

  • Notwithstanding the risks facing equity markets, we continue to see sufficiently supportive factors to warrant an equity overweight — even in light of the strong performance year-to-date.
  • Over the intermediate term, we think there is good value in bonds, but choppy inflation and economic data continue to pose risks to outsize duration positions in the short term.

More on Market Outlooks