Category: Outlook

Q3 outlook: Central bankers strike back

The more policymakers worry about inflation, the less investors need to. We’re willing to buy into further market weakness – and have done so in the past weeks. But we’re also likely to dial down our stance should the prospects of a recession grow.


The first six months of 2022 were particularly challenging for investors, as central banks became increasingly determined to rein in inflation – sparking weakness across almost all asset classes. We believe the next six months will also prove tricky, while providing some tactical opportunities.

Macroeconomic data and news are flowing uncomfortably in the direction of both persistently elevated inflation and lower economic growth. The war in Ukraine continues to pile pressure on already-squeezed commodity markets.

Even though the outlook remains shrouded in uncertainty, we have a high conviction that central banks will act in the face of rampant inflation. This leads us to expect an aggressive set of rate hikes through the remainder of the year, even though higher prices are already starting to put the stoppers on economic growth as consumer confidence sinks.

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