Short-term vs long-term – which should insurance asset managers be focusing on?

Andrew Putwain: What are we seeing in areas around those ‘macro themes’ of the past few years (inflation, interest rates, etc.) – can you discuss the drivers and the permanence of what we’re seeing at the moment? What is a long-term trend, and what is more short-term?

Amrit Summan: It’s worth reflecting on the economic landscape pre- and post-Donald Trump’s re-election.

At the back end of 2024, we were coming off a year of central banks around the globe implementing rate cuts and attempting to balance the impact of those cuts on rates of inflation. Inflation has remained relatively sticky in parts, particularly services inflation in the UK, for example. Nevertheless, there were signs of the global economy moving towards some stability around inflation expectations, and inflationary pressures seemed to be easing. Generally, it is expected that inflation will continue to tend towards central bank targets over the next few years.

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