Q4 2019 Outlook & Review

In its 4Q 2019 Outlook & Review, QMA’s Global Multi-Asset Solutions team notes that escalating geopolitical risks and increased monetary easing have elevated both the upside and downside risks for the global economy. As such, it’s currently very difficult to determine which force will gain the upper hand. Given this backdrop, we see the potential for significant market swings between now and year-end.

Looking at the global macroeconomic environment, we point out that weak global growth and elevated geopolitical risks have prompted global central banks to embark on a fresh round of easing to stimulate growth and counter the negative effects of the trade war. However, with interest rates already at, near or below zero in many countries, the power of monetary policy may be muted.  Thus, the focus has shifted to the use of fiscal policy as a means of stimulating growth, especially in Europe.