Inflation has eased recently, but secular trends like surging debt levels, deglobalization, aging populations and supply-chain disruptions could keep it elevated in the longer run, along with rates. This scenario poses challenges for multi-asset-class investors.

After the Federal Reserve recently cut rates and indicated that further reductions were likely, the equity market rallied. But sell-offs in August and September signaled investor concerns about an economic slowdown. What are potential outcomes to consider? 

We examine a scenario for how a sudden disruption in credit markets could affect portfolios, especially given indications of the market’s fragility.  

The Federal Reserve is signaling only one rate cut this year, compared to signaling three in March, so rates appear bound to remain higher for longer. Against this backdrop, we updated our macroeconomic scenarios to reflect the latest market data. 

The initiation of the rate-hike cycle by the Federal Reserve has positioned U.S. monetary policy as a major driver of financial markets. What could two downside scenarios for financial markets as investors consider their path forward? 

Global forecasters have recently suggested that the world economy is headed for a soft landing. Our latest market stress test looks at how this and other, less benign scenarios could affect a multi-asset-class portfolio in the coming months. 

What impact could the troubles in the Red Sea have on Europe’s economy and interest rates? We assess the downside risks related to surging freight costs.

Markets seem to be priced for a soft landing, in which inflation returns closer to target levels and recession is avoided. We also consider two potential downside-risk scenarios: a hard landing and a resurgence of inflation. 

The market-implied probability of a U.S.-government default this week shows that investors still view the possibility of such a default as a tail event. But the consequences of a default could be severe and long-lasting.