Investors’ Outlook, July 2023: Time to pause

Key takeaways

• Before the Investors’ Outlook publication goes into a summer intermission, the moment many investors waited for finally arrived, with the Fed hitting the brakes in interest-rate hikes. We now expect one more hike at most, with cuts following in early 2024.
• The Multi Asset experts stand by their expectation that a US recession is coming but see it materializing later than expected due to a resilient consumer, boosted by a strong labor market, and accumulated pandemic savings.
• Against this backdrop, as well as our expectation for inflation’s continued decline and a first rate cut early next year, we find respite in our portfolio positioning and consider all previously expressed views up to date.
• Our colleagues in the Quality Growth Boutique assess the fallout of the US banking crisis and share their views on how a search for quality could provide resilience.