This quarter’s focus considers two key questions: firstly, how much economic slack is necessary to bring inflation back to target sustainably; secondly, are major economies diverging for the first time in two years? Despite rate hikes across the central banks, core inflation and labour markets pose challenges and point toward recessions consistent with our market outlook.

Whilst the US presents the possibility of a soft landing, economic differences are emerging among major developed economies. Various scenarios and investment strategies are discussed, emphasising cash, fixed income, and US equities.