EN - Report (page 2) - Flipbook - Page 4
Our view of investment markets and the economy
•
Uncertainty around new variants may delay interest
rate hikes although the Bank of England was first
off the blocks with a rise of 0.15 percentage
points, to 0.25%, at its December meeting.
•
Meanwhile, the US Federal Reserve’s ‘dot plot’
chart now shows three hikes expected in 2022
and another five in 2023 and 2024, as policy
shifts back towards a ‘neutral’ 2.1% rate.
•
We feel that while talk about hikes and tapering
might be concerning in the short term, they are
ultimately a positive signal on the global economy
reaching escape velocity from the pandemic.
Uncertainty around new variants may
delay interest rate hikes although the
Bank of England was first off the blocks
with a rise of 0.15 percentage points
•
It is also important to recognise this tightening cycle
begins at historically low levels, with emergency
rates rather than the lower end of a normal range.
•
While headline inflation globally has risen sharply
due to higher energy prices and temporary
lockdown-driven supply shortages, the increase
in core inflation has been less pronounced. We
expect levels to fall as 2022 progresses.
•
There remains a split between bulls and bears with
respect to economic outlook so we prefer to take a
balanced, flexible approach where we can focus
on long-term themes and build diversified portfolios
able to perform throughout the cycle.
While headline inflation globally has
risen sharply due to higher energy prices
and temporary lockdown-driven supply
shortages, we expect levels to fall as
2022 progresses
4 - Liontrust Multi-Asset Portfolio Services Quarterly Report: Q4 2021
There remains a split between bulls
and bears with respect to economic
outlook so we prefer to take a balanced,
flexible approach where we can focus
on long-term themes
