Brendan de Jongh

The breakout of long bond yields post the Fed cut in September 2024 suggests underlying concerns beyond inflation, with fiscal risks and supply-demand dynamics possibly exerting further pressure on long rates. 

The strong dollar continues to pose a risk to emerging markets, potentially impacting their growth and stability. Additionally, the strong market performance in a narrow segment raises the potential for increased volatility. 

The market seems to carry a cautious yet optimistic stance. The global economy is expected to continue its growth, led by the US, which is expected to have above-trend growth and to outperform other advanced economies. However, potential policy shifts, such as tariffs and slower immigration, could pose risks. Inflation is expected to gradually decrease, but policy uncertainty and geopolitical tensions are a concern. Investors should remain vigilant and adaptable, considering these dynamics and their implications for the market.

‍