With major central banks trying to maintain and, in some cases, regain their inflation-fighting credentials, the world is experiencing its first truly synchronized global monetary policy tightening act. As a result, investors should account for a higher probability of a more severe economic slowdown over the coming year as a necessary condition for a better and more sustainable recovery in the longer term as inflation returns closer to central banks’ targets.
- Will global growth stay strong?
- Have financial conditions sufficiently tightened?
- Will there be many more rate hikes to come?
- How could equity returns compare to the past two years?
Luc de la Durantaye, Chief Investment Strategist
"To ensure a more lasting economic recovery, central banks will have to win the battle against inflation for financial markets to be able to deliver less-volatile returns."