Perspectives: Taking away the punchbowl?
In retrospect, 2021 turned out to be another very good year for global investors. There was no stopping the bull market in risky assets, thanks in large part to still-prudent policymakers. Indeed, last year, while the global economy strongly recovered, the global liquidity tap stayed wide open. Global real GDP growth hit a record level in the second quarter, with estimates exceeding an exceptionally strong 12%.
- Will global growth stay strong?
- How could central banks pursue some form of policy renormalization?
- How could equity returns compare to the past two years?
- Could shifting monetary, credit and fiscal impulses push the global cycle to decelerate, leading to lower developed market bond yields?
Luc de la Durantaye, Chief Investment Strategist
"The challenge is to deliver the right amount of policy rate hikes at the right speed so the global economy experiences a soft landing."