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.
September 6, 2023
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
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
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
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
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
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
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
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
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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