Navigation is often art and science. For sailors, it is literally charting a course through currents, weather and wind – an endeavor that is more complicated when moving upwind. For the bold, skilled sailors can “sail close to the wind,” steering the boat as closely as possible into the wind while still maintaining forward momentum, rather than the more conservative (albeit longer) zig zag path. We think this analogy applies to the current investing environment. Read the latest edition of Vantage Point to find out how the Global Economics and Investment Analysis (GEIA) team at BNY Advisors to find out more. 

This year has seen markets consistently flip between two dominant narratives. In one, thanks in part to artificial intelligence (AI), growth is strong, inflation falls quickly, and interest rates come down rapidly. In the other, growth is slowing, but inflation is sticky and interest rates have to stay ‘higher for longer’. These two stories have very different potential implications for asset performance. Read the latest edition of Vantage Point to find out how the Global Economics and Investment Analysis (GEIA) team at BNY Advisors sees the next scene play out.

Welcome  to another edition of Vantage Point, the quarterly economic and markets outlook from the Global Economics and Investment Analysis (GEIA) team.

In this edition of Vantage Point we revisit key questions from a quarter ago regarding the need for a recession to reduce inflation sustainably, potential inflation rebounds, and the idea of peaked rates. While these themes persist, we've adjusted probabilities for 2024 economic scenarios. Firstly, there is an exploration of global ‘Immaculate Disinflation’ whereby inflation falls steadily back towards target almost everywhere without necessitating a recession.

Secondly, we investigate ‘Unavoidable Recession’ whereby leaving monetary policy too loose for too long during 2021-22 has had inflationary consequences that can only be solved by tightening monetary policy sufficiently to create a (mild) recession. Lastly, we explore ‘International Divergence’ whereby this economic scenario is a combination of the previous two, in which the US undergoes a soft landing of sorts, while Europe and the UK move into recession in early 2024.