We see a global economy still growing, but unevenly. AI continues to drive US strength, though concentration and valuations raise risks. Fiscal policy is supporting activity, while geopolitics and inflation add uncertainty. In this environment, diversification, alternatives and active management are essential for resilience.

We are cautiously optimistic on the global economic outlook shaped by central bank policy shifts, inflation moderation and geopolitical realignments. The Federal Reserve’s recent rate cut has prompted a more constructive stance on risk assets, particularly equities, with earnings resilience expected to drive returns. Inflation remains above target, but is no longer seen as a major threat to the Fed’s easing cycle.

Overall, while risks remain – from labour market deterioration to geopolitical tensions – the policy backdrop and earnings resilience support selective risk-taking and diversified positioning.

As much of the trade friction has simply been deferred, we can expect more volatility induced by trade negotiations, so many eyes remain on the US-China trade relationship, particularly with the President’s brand of poker or deal-making.

While we have seen policy fluctuation from the US and a pull-back on Environmental, Social and Governance (ESG) risk and Diversity, Equity and Inclusion (DEI) initiatives, 
as pension investors with a long-term investment horizon, these tools continue to offer value over the long term which will far outlast Trump’s presidency. As a result, FutureWise continues to be focused on ESG integration and Net Zero progress.