Our Asset Allocation Chart Pack has been updated with the latest data and our analysis of recent developments.
Although we’re growing less convinced by the idea that the US economy will tip into recession over the coming quarters, we still expect disappointing growth across advanced economies to weigh on risk appetite over the rest of this year. We think that may pile pressure on ‘risky’ assets and boost to ‘safe’ ones.
We think central banks will generally cut interest rates by more than is discounted over the next year or so. That may help to drive decent returns from sovereign bonds. But we think credit will notch up slightly negative returns over the rest of 2023 as rising spreads outweigh falling ‘risk-free’ yields. We also expect equities to come under some pressure over the rest of 2023. That said, we think they will rebound significantly over 2024 and 2025 as AI enthusiasm fuels a stock market bubble.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services