Our latest Roadmap shares our views on recession risk in the US.  The US economy has decelerated since the spring, and the unemployment rate has risen. However, this slowdown is consistent with a regular ‘soft patch’ from which the economy recovers, rather than the precursor to recession.  We review the main structural drivers of US growth, and conclude that some are strongly inconsistent with recession, while others only weakly point in that direction. From an investment perspective, a binary recession/non-recession decision is too restrictive – a short and shallow recession in which the Fed eases aggressively may be more equity-friendly than a very extended period of stagnating economic growth. We view recession risk for now as best covered by put options and a significant gold exposure rather than a material negative bet on equities. 

Read the full Investment Roadmap here.