- June 1, 2023: Vol. 15, Number 6

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Global macro outlook suggests increased volatility and pockets of economic weakness

by Loretta Clodfelter

Investors should be prepared for increased volatility, and the global macroeconomic situation is likely to worsen, according to the second quarter global macro outlook from Manulife Investment Management. The report, aptly titled Navigating turbulence, warns that investors should anticipate higher and longer bouts of volatility through the first half of this year.

The report notes, “The old market adage is that central banks tend to hike rates until something breaks. Well, we’re at a point where things appear to be breaking. The strain in global financial markets as a result of ongoing tightening in financial conditions and the marked deterioration in market liquidity across key asset classes have crossed important thresholds.”

Increased volatility is likely to be seen around the world. Among the report’s insights:

United States: Most expect a recession in the coming months, but the timing remains unclear. The Federal Res
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