Our capital market assumptions for the next ten years reflect that we are in the early stages of a significant and far-reaching macroeconomic regime change that was set in motion over the past three years.
A mismatch between high demand (driven by monetary stimulus) and impaired supply in the wake of the pandemic and the war in Ukraine, on top of longer-term demographic, geopolitical and economic shifts caused inflation to spike. While we are past peak inflation, we believe the risks of bouts of inflationary shocks over the next decade have increased. In our view, this new period will be marked by labour scarcity, commodity underinvestment, increased geopolitical uncertainty and a move away from globalisation toward ‘friend-shoring' (trade partner selectivity). Stubbornly higher inflati...
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