Quarterly Macro Themes, a quarterly publication by our Macroeconomic Research and Market Strategy Group, explores critical and timely areas of research and updates our baseline views on the economy.
- Inflation: As pre-tariff inventories dwindle and loopholes are closed, tariff payments are likely to rise, a portion of which will be passed along to consumers in the form of higher prices.
- Labor market: Weaker labor supply and demand has pushed down “breakeven” job growth – the pace needed to contain the unemployment rate – and will result in slower long-term potential economic growth.
- Monetary policy: The Fed’s job gets tricky, and risks lean toward more rate cuts as faster-than-expected labor market weakness could raise recession odds.
- Investment Implications: Fixed income can provide attractive yields, price appreciation, and portfolio diversification benefits. U.S. fixed income continues to provide important diversification to equity risk in our view.
Important Notices and Disclosures
Diversification does not ensure a profit or protect against loss.
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