ROOT
State Street Global Advisors maintains soft landing forecast despite trimmed rate cut expectations
ROOT
State Street Global Advisors maintains soft landing forecast despite trimmed rate cut expectations
State Street Global Advisors (SSGA) has released its midyear update of the Global Market Outlook, highlighting the resilience of risk assets despite increased uncertainty, stickier-than-expected inflation, and a deepening Middle East conflict.
State Street Global Advisors maintains soft landing forecast despite trimmed rate cut expectations
State Street Global Advisors (SSGA) has released its midyear update of the Global Market Outlook, highlighting the resilience of risk assets despite increased uncertainty, stickier-than-expected inflation, and a deepening Middle East conflict.
Although rate cut expectations have been trimmed amid persistent inflation, SSGA maintains its soft landing forecast for the economy. The report notes that bond markets, regarded as the likeliest winner for 2024, have struggled as inflation lingered, spawning "higher for longer" concerns.
In terms of the macroeconomic outlook, SSGA believes disinflation will continue in the US, and economic activity will be weaker this year relative to last year. The firm anticipates the Fed will be in a position to lower interest rates as early as this summer, with a soft landing still being the base case scenario.
The report points to broadening signs of momentum loss in consumer discretionary spending, expanding signs of erosion in labour demand, and widening signs that the big fiscal impulse to growth is beginning to fade. SSGA sees moderation in demand facilitating moderation in inflation, both in labour and goods/services markets, allowing for rate cuts that preserve and nurture the soft landing. Outside of the US, the firm expects the European Central Bank (ECB) to deliver a first cut in June.
On the geopolitical front, SSGA notes that 2024 was always going to be a turbulent year, with US elections carrying their own inherent policy risks that directly affect the world's largest capital market and indirectly impact the majority of global public assets. The elections are occurring against a backdrop of deeper rifts in the global order, several armed conflicts, fiscal headwinds, and protectionism.
As a consequence, the coming months will have a higher-than-normal threat of geopolitical shocks that affect markets. The report states that the global order has frayed, and malicious actors have more room to manoeuvre in an election year than they might otherwise have.
Aside from the Middle East tensions, SSGA highlights that several other regions present the potential to reset risk perceptions, with the centrality of East Asia in the world's global supply chain meaning that any headline risk could have an outsized market impact.
RELATED ARTICLES
Invest
State Street Investment Management holds steady on ETF model portfolio allocations
State Street Investment Management has maintained its asset allocation for its Risk-Based and Target Income ETF Model Portfolios despite market volatility and adjustments by other major players in the ...Read more
Invest
State Street Global Advisors rebrands as State Street Investment Management
State Street Global Advisors has rebranded as State Street Investment Management as the world's fourth-largest asset manager seeks to reflect its growth strategy and strengthen client partnerships. Read more
Invest
North platform launches 'Blend' model portfolios with BlackRock and Lonsec
AMP's North platform has launched a new model portfolio offering called 'Blend' in partnership with BlackRock and Lonsec Investment Solutions, targeting advice practices that want customised ...Read more
Invest
Australian investors add $8.6 billion to managed funds amid global uncertainty
Australian investors demonstrated cautious resilience by adding $8.6 billion to managed funds between January and May 2025, according to new data from Calastone. Read more
Invest
ASX companies gear up for end of financial year reporting season
ASX-listed companies are preparing for the end of the 2025 financial year, with many seizing opportunities to engage with investors through roadshows and industry conferences. Read more
Invest
Digital finance innovation could deliver $19 billion annual boost to Australian economy
Digital finance innovation has the potential to deliver $19 billion in annual economic gains to Australia, according to new research from the Digital Finance Cooperative Research Centre. Read more
Invest
Echelon completes $400,000 acquisition of Northern Territory gas permit
Echelon Resources has completed the acquisition of a 100 per cent interest and operatorship in Exploration Permit EP145 in the Amadeus Basin, Northern Territory, for $400,000. Read more
Invest
Institutional investors return to risk-taking as tariff fears ease
Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators. Read more
Invest
State Street Investment Management holds steady on ETF model portfolio allocations
State Street Investment Management has maintained its asset allocation for its Risk-Based and Target Income ETF Model Portfolios despite market volatility and adjustments by other major players in the ...Read more
Invest
State Street Global Advisors rebrands as State Street Investment Management
State Street Global Advisors has rebranded as State Street Investment Management as the world's fourth-largest asset manager seeks to reflect its growth strategy and strengthen client partnerships. Read more
Invest
North platform launches 'Blend' model portfolios with BlackRock and Lonsec
AMP's North platform has launched a new model portfolio offering called 'Blend' in partnership with BlackRock and Lonsec Investment Solutions, targeting advice practices that want customised ...Read more
Invest
Australian investors add $8.6 billion to managed funds amid global uncertainty
Australian investors demonstrated cautious resilience by adding $8.6 billion to managed funds between January and May 2025, according to new data from Calastone. Read more
Invest
ASX companies gear up for end of financial year reporting season
ASX-listed companies are preparing for the end of the 2025 financial year, with many seizing opportunities to engage with investors through roadshows and industry conferences. Read more
Invest
Digital finance innovation could deliver $19 billion annual boost to Australian economy
Digital finance innovation has the potential to deliver $19 billion in annual economic gains to Australia, according to new research from the Digital Finance Cooperative Research Centre. Read more
Invest
Echelon completes $400,000 acquisition of Northern Territory gas permit
Echelon Resources has completed the acquisition of a 100 per cent interest and operatorship in Exploration Permit EP145 in the Amadeus Basin, Northern Territory, for $400,000. Read more
Invest
Institutional investors return to risk-taking as tariff fears ease
Institutional investors moved back towards risk-taking in late May following delays to trade tariff implementation, according to State Street's latest Institutional Investor Indicators. Read more
