Political developments in the US, Europe and UK create the sense of a world in transition. In a live roundtable, our senior portfolio managers discussed four key areas of transition, as described in our 2017 Investment Outlook, and the key implications for investors. Below, we present highlights from the live discussion.
Globalization has been a defining trend for a generation. Now, we believe a rising tide of populism is challenging this trend and creating new risks and opportunities. Our portfolio managers discussed the implication of recent geopolitical events and upcoming elections in Europe, as well as the impact on trade and emerging markets.
While the new US administration is emphasizing less regulation, other countries continue to increase regulation. Our portfolio managers discussed how this divergence in regulatory regimes may influence global growth and business trends.
Years of focus on monetary policy are giving way to a focus on fiscal policy. Our portfolio managers discussed the increasing divergence in policy across the US and Europe and outlined implications for interest rates across global markets as well as corporate spending.
After a prolonged period of low growth and low inflation, concerns about secular stagnation now appear to be giving way to concerns about inflation risk. Our portfolio managers discussed how a pick-up in inflation could impact global markets and corporate profitability.
In a round-robin discussion, our portfolio managers highlighted the current opportunities and risks they see across multiple asset classes in light of these transitions.