Key highlights from this interesting read.
Short term government bonds and securities may offer attractive return. Due to the higher interest rates hike.
High grade credit is positive during recession time while longer term government securities could be affected negatively.
Aging workforce is leading to demand shortage. Developed markets cannot produce as much as before without creating inflationary pressure.
Inflation will not be able to come to the 2% forecast however the hiking will stop in 2023.
Metrics to watch could be delayed capital spending plans (possibly due to the increased rate in the cost of borrowing), consumer depleting savings (sky high cost of living scenario), CEO confidence levels (as earnings recession is still to come) and Home sales (could be negatively affected due to the high mortgage rates which buyers would have to face in this market).
Current prices do not reflect the mild recession.
Negative correlation between stocks and bonds have gone. They can both go down at the same time.
Overweight inflation linked bonds.
Significant investment needed in real estate and infrastructure. World bank estimates a shortage of $15 trillion between what is needed and current spending levels.
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