1st Quarter Forecasts
2022 is set to be another good year for growth, albeit the recovery is likely to remain unbalanced.
As a potentially disruptive virus variant darkens the economic outlook, market players are touting defensive buffers to cross-asset strategies just as hawkish signals from the Federal Reserve further undercut risk appetite.Recommends reduce exposure to equity and long duration credit exposure in the first half of next year.
“Clearly there’s some downside risks to growth. There’s also further upside risks to inflation in the near-term. The outlook becomes less supportive of risk assets in the near-term.”
Risks include higher-than-expected inflation and weaker growth.
The emergence of the Omicron Covid variant has reminded us of the uncertainties which remain around the global pandemic. Despite these, we expect 2022 to be another good year for growth as the global economy continues its recovery.
We do, however, see growth cooling following an exceptionally strong 2021, as the massive support offered by governments and central banks during
the pandemic’s initial stages begins to fade.