7 January 2022
Our economic road map for 2022 suggests that the first six months of the year could be problematic, particularly when compared with 2021: Price pressures look as though they might ease, but inflation could remain uncomfortably high for the first few months of the year. This is a continuation of the stagflationary narrative that persisted in the second half of last year, and the emergence of the Omicron variant could tip us further in that direction.
Prospects for the second half of 2022 look better, as inventory rebuilds, and the unwinding of supply chain disruptions could fuel a more sustainable recovery. An improved growth picture and slower inflation should bring us back to a Goldilocks regime, which should be far better for market returns and general risk assets.
It isn’t particularly fashionable or click-worthy to admit that we have less confidence in our base-case projection than normal, but we believe it’s important to acknowledge the highly uncertain environment that we’re in as we head into a year dominated by a very long list of known unknowns.
To learn more about the macroeconomic themes for North America, Europe, Asia-Pacific and Latin America, download the full edition.
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Global Macro Outlook Q3 2023: The long and winding road
At the time of writing, only the eurozone and New Zealand have slipped into recession (as defined by two consecutive quarters of negative growth). But don’t pop the champagne just yet: We see this as a case of recession postponed rather than canceled. Read more.
Asian High Yield: Building resiliency amid volatility
Although emerging from a difficult period, Asian-high-yield is positioned to weather the current market volatility due to regional economic strength and unique asset class characteristics.
Global Macro Outlook Q2 2023: Navigating turbulence
At this point, we believe it’s crucial to reassess how we should be thinking about the Fed’s approach to policy making, especially in the context of the second biggest bank failure in U.S. history which has raised doubts about the health of the U.S. banking system.
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