A rapidly evolving landscape - Inflation, rates and geo-politics


At the latest Crestone Investment Forum, held on 22 February 2022, we asked panelists to share their views on the likely path of markets and the global economy in 2022. Key issues focused on the likely persistence of inflation, whether central banks could manage inflation lower without damaging the economic recovery, and when fixed income assets would become attractive.
Our panellists included Ben Powell, BlackRock Investment Institute Chief APAC Strategist, Steven Watson, Portfolio Manager at Capital Group, Catherine LeGraw, Asset Allocation Strategist at GMO, Bill Callanan, Chief Executive Officer at Syzygy Investment Advisory, as well as Crestone Wealth Management’s Scott Haslem and Stan Shamu.

  • Monetary policy should remain accommodative—Panellists were split on whether inflation would remain persistent or if it was more transitory in nature. Although interest rates are expected to rise this year, monetary policy should remain accommodative, and households and corporates have enough firepower to withstand the likely tightening.
  • Equity markets now face several headwinds—After benefiting from an extremely favourable stimulatory environment, equity markets now face several A focus on quality and value were persistent themes during the discussion, as well as the need to broaden exposure beyond the US. At the time, the Russia/Ukraine conflict was viewed as largely priced in.
  • Alternatives remain attractive—Panellists were broadly constructive about alternatives and the opportunity set they offer. However, given the current gap between public market and private market valuations, manager selection will remain key, as well as the need to be selective about investment opportunities.
  • Fixed income remains challenged—Rising yields are expected to continue to pressure bond prices, creating challenges for fixed income Given the higher yields on offer in emerging markets, panellists indicated a preference for selective opportunities in this segment.