A more dovish rate cut than anticipated by the U.S. Federal Reserve has created an interesting setup for fixed income markets next year. The focus on its independence adds another dimension.
Irrespective of whether the Federal Reserve cuts rates this week, we expect rates to fall, stimulating a reacceleration in the economy and supporting the prospects for risk assets.
Recent AI-related volatility across risk markets mixes signal with noise. The more important task is to recognize that we are in a multiyear buildout and to invest with that sequencing in mind.