What a Difference a Quarter Makes
Volatility spikes have returned with concerns around a slowing global economy, quantitative tightening around the globe, trade wars, maturing tech giants, and the piles and piles of debt, at all levels. There are many signs indicating global growth is in the later stages, and concerns of a potential recession in the next 6 to 24 months are real.
We are in the midst of the longest economic expansion in modern history (at least in length, but not so much in magnitude). Let’s take a moment to review one of the themes over the last few commentaries: the growing correlation between central banks’ balance sheets and the MSCI ACWI Index (all country world). As you can see below, the correlation remains strong, and central bank balance sheets are set to continue contracting at a meaningful pace.