Where to unlock opportunities in a changing world

GLOBAL inflation has fallen since the energy-induced spike that followed Russia’s invasion of Ukraine in 2022, and financial-market participants have been pricing in and out expected interest-rate cuts by Western central banks, depending on whether inflation prints are higher or lower than expectations.

We think the real issue is not whether interest rates should be cut twice or three times in 2024, but whether the market is correct to have anchored longer-term inflation expectations to historic norms.

We believe that investors are now facing a very different market regime, and we are unlikely to see a return to the benign conditions of the previous decade.