Falling global bond and equity prices in the past few days reflect upward revisions to expectations for inflation and US interest rates, rather than any concern that global growth is faltering. In the near term, equity markets may well recover their poise, as the world economy is still in good shape. Moreover, we do not expect any significant fallout from the moves in financial markets for global growth. After all, the world economy has shrugged off several much larger set-backs than the recent fall over the past few years. Nonetheless, most of the multi-year bull market may now be behind us. We expect global equity prices to end the year below their current levels.
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