Investing around the election and debt issue
A strategic decoupling from China, and potentially several other trading partners, looks likely to have bipartisan support regardless of who holds office. How this plays out will greatly impact where you choose to be an equity vs debt investor. That doesn’t mean one should avoid taking risk altogether, but the imperative to be tactical, pragmatic, and more respectful of tail risks will be higher in a more protectionist world. Relatedly, inflation has come a long way from the peak, and we don’t see it reaccelerating as the Fed cuts, but we see little further downside from here. As favorable base effects fall out of the calculation, we see core CPI stabilizing somewhere in the mid-to-low 2s, with some risk to the upside. As such,…
