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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.