VANTAGE POINT: THREADING THE NEEDLE

Welcome to another edition of Vantage Point, the quarterly economic and markets outlook from the BNY Investment Institute.

Earnings growth is on investors’ minds, especially as it broadens beyond the big tech stocks that have shown the most improvement in the past. We believe this is a positive sign for continued equity gains.

Fixed income has long been regarded as a tool for capital preservation, liability hedging and predictable income streams. But in an era of elevated absolute yields and steeper yield curves, Insight Investment believes the asset class merits a fresh look. In a new report, Insight argues fixed income is not just for defence, but also a genuine engine of long-term capital growth.

A U.S. government shutdown began on October 1, 2025, with Republicans and Democrats at an impasse over a deal to keep the federal government funded. The closure could see around 750,000 workers furloughed and cost the U.S. economy billions of dollars. Markets do not appear to be discounting a lengthy shutdown, but it is a risk and adds to economic uncertainty.