"Uncertainty around the global economic outlook has increased following the election of President Trump. Should President Trump follow through fully on his campaign proposals, the US and global economies would slide into recession. However, our baseline projects a more benign outcome which would see the US and global economies remain on a soft-landing path. With global inflation pressures continuing to ease, most central banks are expected to reduce interest rates further. Slower inflation will also allow the RBA to join the global rate cutting cycle with two rate cuts in the first half of 2025."

Dr Matthew Peter, QIC Chief Economist

"We see a more tepid global economic growth path given today’s heightened global geopolitical uncertainty and the likelihood of increasing divergence in policy paths for many developed market economies. Coupled with relatively lofty equity valuations, the unknown impact of AI and challenging supply demand dynamics for developed market government debt, both the left and right tail outcomes for global markets remain wide. Given this, we continue to be focused on building resilience within State Investment Portfolios, seeking to increase portfolio diversification. We continue to view yield-based strategies such as private and infrastructure debt as offering attractive risk vs reward characteristics."

Allison Hill, QIC State Chief Investment Officer