Summary
- The last few years, and the past year in particular, have served as a lesson that, when trying to make educated guesses about what is most likely to happen, you have to pay more attention to the underlying signals than the deafening noises. The noise can be disorienting, but those underlying signals tend to point to the clearest path forward.
- So, while the current environment remains primed for tape bombs, sabre rattling, policy announcements and reversals of course, and all sorts of headline risk, the actual fortunes of the economy and markets will most likely hinge on the fundamental drivers of growth.
- And on that score, despite the elevated uncertainty and potential risks, things look constructive.
- Consumers remain on solid footing and are positioned to continue to play a key role in sustaining economic momentum.
- The potentially transformational impact of Artificial Intelligence (AI) advancements is spurring technology expenditures and leading a renewed business investment cycle.
- For their parts, governments are implementing significant capital spending plans to enhance domestic infrastructure and national defence.
- While the confluence of these positive drivers points to less economic support coming from monetary policymakers, the easing over the last few years to get closer to “neutral” (and a high bar to reverse course) suggests rates will be less of a headwind.
- For sure, there are risks to this outlook, but barring an unforeseen shock, this all sets up for a constructive backdrop for financial markets across asset classes that looks likely to support further positive returns.
Download the full outlook
