With the paths of major economies poised to diverge, we believe it is critical to actively seek out investment opportunities globally.

With the global economic outlook still clouded and equity markets priced for a soft landing, bonds offer attractive yields and resilience across multiple possible outcomes.

Our outlook for the global economy and markets over the next year

Markets will likely face more volatility as the global economy exits a period of massive fiscal and monetary support. In this post-policy era, attractive yields on high- quality bonds encourage a more resilient approach to investing.

The effects of tighter financial conditions are becoming apparent, bringing forward the risk of recession while suggesting a supportive backdrop for bonds.

Resilient assets with attractive yields can help portfolios stay centered in 2023, when we expect inflation to moderate, central bank policy to steady, and a recession to take hold.

With yields now higher, we believe bonds offer compelling value in this challenging macro environment.

Volatility, inflation, and geopolitical strain have countries and businesses focusing on defense. We argue for building resilience in portfolios in this fragmenting world, and delve into risks and opportunities we foresee over the next five years.

Active management and risk awareness may help investors navigate a global economy where inflation becomes “too hot” and growth “too cold.”