October 2022 | Inflation remains in the spotlight: the latest US reading was concerning, causing yields to rise while equity markets tumbled. Looking ahead, we confirm the outlook of slowing US inflation, but we think central banks, including the Fed and the ECB, will remain hawkish. Meanwhile, the economic outlook could deteriorate, as the US faces an extended period of sub-par growth and the outlook for the Eurozone appears gloomier, compounded by the ongoing energy crisis.
01 | Amundi Institute Insights: While it appears that inflation has passed its peak in select countries, it will still remain above central bank targets in the near term. We believe investors should aim for real returns, despite the current growth deceleration.
02 | Fixed Income: While staying cautious on risk assets and liquidity risks, we prefer high-rated debt with an overall flexible approach. Although we maintain a close-to-neutral view on duration, we now have a positive bias regarding higher yields.
03 | Equity: We remain selective and avoid businesses with excessive debt on their balance sheets in light of the increasing cost of capital and a slowing economy. Overall, we keep our preference for the US.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of October 05, 2022. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.
