United States
High US inflation is being driven by tariffs, not domestic inflationary pressure. This argues for Fed easing and a bull-steepening of the Treasury curve.
USD-denominated Emerging Market bonds have been outperforming US corporates for the past year. We don’t think the rally is exhausted yet.
The economy is slowing, but not collapsing, and monetary easing is imminent — a backdrop that will benefit equities. We remain strategically bullish, with a close eye on GenAI and resilient earnings, even amid numerous risks. However, we are tactically cautious, as seasonality, elevated valuations, and stretched technicals present near-term headwinds.
The August employment report showed a modest increase in labor market slack, enough to cement a 25-basis-point rate cut this month.