We are starting to see the expected deceleration, but the long economic expansion should continue into 2020-21.
Central banks have reversed their posture and are lowering rates and adding liquidity in the face of a slowing global economy.
Inflation has remained subdued and global demand for income has driven interest rates lower this year. Rates are likely to retrace some of the drop experienced late in 2018 and the first half of this year, but any increase is now likely to be modest.
Although economic growth and earnings growth are expected to slow, we are expecting continued economic expansion. This should leave room for modest gains in equity markets over the medium term.
Ongoing uncertainty on trade and politics should continue to dominate the headlines for some time. While our expectations are for moderate, positive returns, we do expect the level of market volatility to remain elevated.
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