Excess Returns The Great Moderation is Over. The Great Convergence is Here | Luca Paolini on What Comes Next
8 snips
Jul 8, 2025 Luca Paolini, Chief Strategist at Pictet Asset Management, shares insights on the fading era of U.S. exceptionalism and the upcoming Great Convergence in global markets. He discusses the shifting landscape of investments, advocating for bonds and other income-generating assets, while exploring the implications of rising debt and protectionism. Paolini also delves into how AI impacts productivity and market valuations, along with the roles of gold and cryptocurrencies in future portfolios. A thought-provoking conversation for investors navigating change.
AI Snips
Chapters
Transcript
Episode notes
Understanding the Great Convergence
- The "Great Convergence" means the U.S. will lose some dominance as other regions catch up.
- This era follows the "Great Moderation" and the "Age of Uncertainty" with more balanced global economic growth.
Debt and Tariffs Weaken Growth
- Rising global debt and tariffs will weigh heavily on economic growth and inflation.
- The U.S. faces the biggest impact due to fiscal stimulus and protectionism risks.
U.S. Growth Drives Global Markets
- U.S. economic growth is the key driver of global markets, not just U.S. GDP share.
- Slower growth and sticky inflation will create tougher conditions for investors ahead.