Asset Allocations: The risks of a recession rose in Q1, but it is not yet the base case of our outlook.
Change from previous quarter
|U.S. large cap|
|U.S. small cap|
|U.S. investment-grade corporates|
|U.S. floating-rate bank loans|
|U.S. high yield|
|Non-U.S. developed country|
Currency viewsU.S. dollar versus
|Favor other||Neutral||Favor dollar|
Neutral on equities, again
We advocate caution for the second quarter, as the S&P 500 Index might not fully reflect risks to U.S. consumer spending.
Reducing credit risk
It is likely that the pull-forward in spending from pandemic-related stimulus and higher inflation will combine to sap the spending power of U.S. households in 2022.
Energy and other commodity prices have surged as Russia's invasion of Ukraine and war-related sanctions disrupt supplies.