We remain conservative (U.S.) and cautious (International) with equity exposure as we believe that near-term equity drawdown risk remains elevated with the unfriendly mix of higher inflation, recession risk, and rising rates.

Our base case view is that the monetary policy response priced by markets should curb inflation with only an economic slowdown or a mild recession. However, markets will likely remain volatile until the growth/inflation backdrop improves, as investors swing between inflation frustration and recession obsession.

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