We’ve also said before that this new macro and market regime is marked by persistent, structural inflation pressures. We think U.S. inflation can fall further toward 2% this year due to falling goods prices. Yet we see inflation on a rollercoaster back up in 2025 as the drag from goods deflation fades and elevated wage growth in a tight labor market keeps services inflation higher than pre-pandemic. Mega forces, or big structural shifts we see driving returns, are also likely to push up on inflation. That’s why we see central bank policy rates staying higher than they were before the pandemic and inflation likely settling closer to 3%.
We believe that calls for staying nimble in portfolios and deliberately managing macro risks.
Taking the investment wheel
Expectations for S&P 500 earnings growth for 2024 have been revised up, with the tech sector expected to account for half of this year’s S&P 500 earnings.
We went tactically…
