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Finding Opportunities in Recession – Throw Out the Old Playbook

Central banks around the world have staged a coordinated response to inflation. In mid-December, the Federal Reserve and European Central Bank each hiked interest rates by half a percentage point, capping off a year of aggressive policy action to bring inflation down to more manageable levels. Analysts say the aggressive policy response tips the global economy closer to recession. Investors are betting that policymakers will come to the rescue before that happens.

Let us review the old playbook by which central banks have operated in the past to ride over recessionary phases and see if an alternate playbook can offer a better pathway.

Be sure to check our Portfolio Management Channel to learn more about different portfolio rebalancing strategies.

The Old Playbook

An Alternative Playbook

The Bottom Line