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LGT Beacon: Entering the great transition

August 18, 2021

Inflation fears are easing and investors continue to reassess the growth outlook, as the economic rebound's momentum has peaked and monetary policy transits to a less expansionary setting. Ultimately, we expect growth to stabilize above trend, but the transition bears the risk of volatility spikes. We recently increased cash by reducing our gold position. 

Recent developments confirm the macro outlook has become more bifurcated. On the one hand, global aggregate demand remains at strong levels but growth momentum has peaked and market participants are reassessing the growth environment. In the US, for instance, economic growth is probably going to slow from an estimated 6% to 7% this year, to somewhere around 3% to 4% by the end of 2022.

On the other hand, the macro stimulus measures of the developed economies will provide them with at least one more year of above-trend growth. These policies had supercharged the recovery from the historically unique coronavirus recession – which the National Bureau of Economic Research (NBER) recently confirmed as the shortest on record.

Read on by clicking the link here: LGT Beacon

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Note: The next edition of the LGT Beacon is scheduled for September 2021.