The consensus view for this year is reassuring: economic growth in the US and Europe will hold steady, inflation will ease further, the Fed will cut rates, and the ECB will stay on hold. This points to a calm outlook for interest rate markets.  
Yet appearances can be deceptive. Geopolitical tensions, potentially stronger-than-expected growth, and mounting concerns over public finances are likely to send bond markets into choppier waters.

The consensus expectation is that shares will have another good year and monetary policy will be further loosened. This underestimates several risks that could undermine many of the pillars supporting economic growth and the stock markets. In this final asset allocation report of the year, we answer the question of what this means for the outlook for asset prices and tactical asset allocation.

The Fed is shrugging off inflation risks — wrongly. Our 9-step roadmap reveals why the US and Japan are already well on their way to higher inflation and why Europe risks being dragged along. We spell out the concrete implications for SOFR, EURIBOR and capital market rates — and why near-term declines in interest rates are precisely the moment to consider hedging your interest rate exposure.