A majority of BlackRock Inc.’s top decision-makers had a simple conclusion after gathering in London last week: A supportive backdrop for risky assets probably has “room to run” -- for at least 12 more months.
Senior leadership at the world’s largest asset manager cited easy monetary policies and few signs of financial imbalances, BlackRock’s Jean Boivin, Elga Bartsch and Scott Thiel wrote in a report.
Still, trade and the Federal Reserve remain big questions. Escalating tension between the U.S. and nations including China and Mexico compounds growth risks, while the market may have been too aggressive in pricing in significant interest rate cuts by the Fed, they said.
“We see this week’s FOMC meeting providing an opportunity for the Fed to manage market expectations, as the market’s pricing of rate cuts has materially diverged from the central bank’s patient policy stance,” Boivin, Bartsch and Thiel wrote.
BlackRock’s overweight recommendations over a three-month horizon include U.S. stocks, emerging-market equities and Asian ex-Japan shares as well as U.S. municipal bonds, while it’s underweight European equities and bonds.
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