The cycle vs the trend: Investors need to prepare for secular change
Bigger and more difficult choices need to be made as a new inflection point emerges in markets
OVER the past several months, we have witnessed a significant shift in expectations about the economic cycle. A year ago, many economists and investors expected the global economy to enter a recession driven by sharp rises in interest rates to combat the surge in global inflation.
By contrast, at the start of this year, the consensus expectation is more benign – inflation is now slowing, paving the way for a series of interest rate cuts and a soft economic landing.
Financial markets tend to anticipate changes in the cycle before they materialise. In the first part of 2022, for example, rising interest rates and fears of recession pushed global equity prices down.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
