Biden's withdrawal from the presidential race increases uncertainty, but a Trump victory is still likely. Depending on whether Republicans secure a large majority in Congress, it means the prospect of higher US interest rates. But even if Democrats prevent Congress from falling entirely into Republican hands, the remaining downside potential of long-term interest rates seems limited...

Strategic Asset Allocation (SAA) plays a crucial role in an investors’ decision-making process. This report features the quarterly update of three SAA models, their portfolio characteristics and the data we have used to construct the SAA models. In addition, we update the Expected Returns based on the return assumptions of approx. 50 asset managers and present tables with volatility and correlation data for every asset class.

Following the debate between Trump and Biden, long-term interest rates rose although incoming data continue to point to downward pressure on inflation and economic growth. What is the reason for this and what does it say about the medium-term outlook for longer-term interest rates?