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Article TitleSecular Outlook:
Navigating the Multi-Speed World
- Balance sheets, both across and within economies, are still out of
equilibrium. We expect advanced economies will face sluggish growth and
persistently high unemployment over the secular horizon. Emerging
economies will achieve higher growth but face recurrent inflationary
- We do not expect policymakers to boldly address structural problems.
By targeting negative real interest rates, they will pursue financial
repression that undermines the “real return” contract that savers
- Secular baseline portfolio positioning should minimize exposure to
the negative impact of financial repression, hedge against higher
inflation and currency depreciation and exploit the heightened
differentiation in balance sheets and growth potentials.