Global Asset Allocation Strategy — May 2025

May 5, 2025 — Global Asset Allocation Strategy provides an overview of key economic and policy themes and how Sage is positioned in the current market environment.

Key Takeaways

• Markets have entered a phase where they are becoming desensitized to heightened uncertainty and adopting a “wait and see” mindset.
• Data will continue to be whipsawed by the magnitude of the trade shift, but ultimately the unpredictable nature of the administration makes a quick resolution unlikely and the negative feedback loop worse. We anticipate that the Federal Reserve will maintain a patient stance due to immediate inflation concerns and the absence of significant downside growth data.
• From an asset allocation perspective, increased economic risks suggest favoring yield-oriented investments over risk assets to insulate against volatility; and duration, to hedge risk and provide a benefit vs. cash given steeper curves.