Despite economic uncertainty and rising defaults, we believe leveraged credit in the U.S. continues to offer attractive return potential.

Our long-term return expectations for capital markets serve as key inputs into our strategic asset allocation process for multi-asset portfolios and provide context for shorter-term forecasting.

An unexpected shock in the banking sector has stress-tested the economy and policymakers. Both initially passed. But the impact on lending and credit conditions remains unclear and increases the likelihood of a mistake by the Fed going forward.

Weak global growth for the year ahead appears almost certain. The outlook for capital markets is anything but.

Funding ratios rose again in 2022, putting plan sponsors in another surprisingly strong position. But with critical decisions looming, de-risking and diversification are paramount.