Multi-Asset Income Midyear Outlook: Income And Resilience Among The Bumps

Summary

• As we look to the second half of 2025, key macroeconomic drivers will likely include the direction of US fiscal and trade policy, the Fed’s monetary policy stance and timing of potential rate cuts, and ongoing geopolitical and other related uncertainties.
• Recession remains a tail risk. However, we believe its probability is relatively low and our base case is for a downshift to moderate economic growth, depending on how the global trade situation unfolds.
• We think multi-asset income investing is well-suited for this environment, not only for yield potential but for resilience against a more uncertain backdrop.
• We continue to buy into the case for US exceptionalism, believing that the country’s unique qualities still support compelling and diverse investment opportunities versus other countries. But we also see the many benefits of global diversification among stocks and bonds.

SARINYAPINNGAM

By Karen Watkin, CFA, Fahd Malik, Edward Williams

Compelling bond yields and diverging equity returns offer building blocks for effective strategies.

We expected 2025 to unfold in two halves, starting with a supportive macro backdrop carried over from 2024. We