Wheels down, elevation up: Five themes for a new economic landing
We think the economy is experiencing a different kind of landing that defies easy categorization. It’s one in which inflation and monetary policy rates settle but stay structurally higher than they were pre-Covid. And while this landing may lack a label, it’s replete with opportunity for investors willing to adjust their portfolio itineraries. We offer these thematic travel tips as a starting point:
- Relative spreads and credit selection, not risk-free rates, will drive returns in debt markets.
- Real estate reality: it’s already bottomed.
- Energy demand charges ahead of capacity, creating opportunity for new infrastructure investments.
- Municipals are still the borrower of choice for investors in it for the duration.
- Small caps are suiting up for the big leagues.
