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.