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Investment Event: Markets move on geopolitical risk

Inflation is likely to be higher-for longer. On balance, policy makers are likely to try and look through the more extended period of high inflation.
25 February 2022
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    • Markets have responded to heightened geopolitical risk in a typical risk-off pattern
    • Inflation is likely to be higher-for longer given the rise in energy prices.
    • The confidence channel will be an important determinant of the impact on growth
    • The economic impact is likely to be uneven across economies
    • On balance, policy makers are likely to try and look through the more extended period of high inflation
    • Recent market developments reflect a rise in the geopolitical risk premium
    • For now, investment markets are stuck in a regime of “inverse Goldilocks”
    • We continue to run investment portfolios in a defensive fashion