Current Challenges Investors Face

Current Challenges Investors Face
Current Challenges Investors Face
Today’s environment is radically different from what most investors have experienced over the past 30-40 years. MP3 policies were very successful in stimulating a rapid recovery from the pandemic. But this stimulation was applied for too long, resulting in persistent inflation and the need for central banks to slow the economy through aggressive tightening. Explore our research on the current challenges this new environment presents for investors.
January 3, 2024
Karen Karniol-Tambour, Melissa Saphier, John Michael Cassetta
The secular investment landscape looks more like decades past than the last 20 years, while dynamics like AI and climate change will likely shape the world in unprecedented ways. Co-CIO Karen Karniol-Tambour describes this new era of investing.
November 8, 2023
Greg Jensen, David Gordon, Daisuke O, Jackson Rumer
The forces that have cushioned the impact of the tightening so far are unsustainable. As past supports fade and rates stay high, we expect balance sheets to deteriorate and growth to gradually grind down. Co-CIO Greg Jensen explains how we expect this dynamic to be the dominant driver of economies and markets over the next 12-18 months.
October 27, 2023
Bob Prince, Shane Murphy
The economy is now only moderately out of balance, with lagged effects from prior tightening likely ahead. Co-CIO Bob Prince explains that what is more out of balance is the pricing of markets in relation to these conditions.
September 30, 2023
Bob Prince, Greg Jensen, Karen Karniol-Tambour
Higher rates for longer will drag bond yields higher and produce a grinding pressure on growth. A rise in yields and low growth will further compress equity yields relative to bonds.
September 6, 2023
Karen Karniol-Tambour, Shane Murphy
One way to understand how the cycle is playing out is by breaking down the spending in the economy into its sources: incomes, borrowing, and changes in saving. Private sector borrowing has been crushed by the tightening and households have stopped reducing their savings, but strong income growth has outweighed these drags and will likely take more than just the tightening to date to crack.
August 16, 2023
Bob Prince, Aaron Goone
When we look across the metrics we’re tracking to know if the tightening has been sufficient, we see the Fed has made notable progress toward its goals. However, we still don’t see the conditions that would warrant the easing markets are currently discounting.
August 4, 2023
Greg Jensen, Jim Haskel
Co-CIO Greg Jensen explains how changes to the composition of US debt issuance have temporarily averted some of the most important consequences of the tightening, and why this support to assets is likely to turn into a drag.
June 9, 2023
Bob Prince, Aaron Goone, Shane Murphy, Gurchit Chatha
Despite a year’s worth of monetary tightening, most major economies remain in disequilibrium. Co-CIO Bob Prince explains how this is not unusual, as restoring equilibrium often takes a series of moves over time. The implications for policy and markets remain material.
May 1, 2023
Co-CIO Karen Karniol-Tambour joins a panel of industry leaders at the Milken Institute’s Global Conference to discuss a wide range of topics impacting global capital markets and investors. Karen focuses on current credit conditions, the asymmetry she’s seeing in the markets, the paradigm shift from a low inflation world, China as a diversifier, and more.
March 24, 2023
Greg Jensen, Alex Schiller, Jim Haskel
Co-CIO Greg and Co-Head of Fixed Income Research Alex Schiller discuss our recent three-part series on the banking crisis and its implications for the financial system, the economy, markets, and the Fed.
February 21, 2023
Karen Karniol-Tambour, Jim Haskel
Our newest co-CIO shares her thoughts on the secular changes shaping economies and markets, how she’s assessing cyclical conditions around the world, and what these dynamics mean for investors.
February 14, 2023
Bob Prince, Aaron Goone
Odds favor a third stage of this tightening cycle likely to be marked either by an economic downturn or failure to meet the inflation target, prompting more tightening. Either would be bad for most portfolios.
December 13, 2022
Karen Karniol-Tambour, Alex Shahidi, Jim Haskel
Bridgewater’s Co-CIO Karen Karniol-Tambour describes why today’s environment is so different from what we’ve seen in recent decades and how investors can prepare their portfolios.
November 10, 2022
Bob Prince, Greg Jensen, Jim Haskel, Jake Davidson
Greg Jensen and Bob Prince describe how they think the tightening cycle is likely to evolve, what it means for the economy and markets, and their areas of agreement and disagreement.
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