We believe US private families should continue to anchor the portion of the portfolio intended to diversify equity risk with munis, while being more selective about allocations to cash, Treasuries, and other taxable fixed income, given the shift in after-tax trade-offs.
The war in Iran has triggered a historic disruption in the Strait of Hormuz, driving oil & gas prices higher and exposing vulnerable energy-importing regions. This shock is fueling concerns over higher inflation and rising bond yields, creating a volatile environment where commodities lead while global equities and traditional bond diversifiers underperform.
No. The proposed policies are unlikely to swiftly resolve the challenges facing US residential real estate.
A disciplined, quality-focused approach across fixed income and private credit can help position portfolios for balanced risk-adjusted returns in a challenging environment in 2026.
Historically, shutdowns have been short-lived and have had negligible economic and market impact. As such, well-diversified investors need not take specific portfolio action in response.
Yes. Current market expectations for the Federal Reserve to lower its policy rate by roughly 150 basis points by the end of next year are overly optimistic.
Description: In today’s environment, building resilient portfolios is essential. Inflation risks are elevated and macroeconomic uncertainty is high. Allocating capital to hedge macro risks may reduce returns, so investors should carefully consider risk tolerance, objectives, and spending needs when assessing their allocations.
No. US Treasury securities are likely to remain among the most effective diversifiers during periods of equity market stress.
No, we do not think the Federal Reserve will cut rates in the near term to rescue financial markets. However, if tariffs begin to significantly impact the real economy, the Fed will eventually act.
We expect most major central banks to continue cutting policy rates, which should allow bonds to outperform cash. With breakeven inflation rates likely to be range bound, returns of inflation-linked and nominal bonds should be similar.