Most global financial indicators are characterised by a lack of obvious stress at the moment
Markets are sanguine about the economic and financial impact of Russia’s invasion of Ukraine and the Fed’s planned cycle of interest rate increases
U.S. central bank is expected to engineer a soft-landing rather than hard one, leading to a mild mid-cycle slowdown rather than a deep recession
Markets expect businesses, households and borrowers to absorb more than 200 basis points of U.S. interest rate increases without difficulty
If there is a cyclical slowdown, it is expected to be conventional downturn in growth, jobs and inflation rather than accompanied by a financial crisis
Russia’s invasion of Ukraine and sanctions imposed in response have not so far resulted in a significant change to the outlook embodied in asset markets