Timothy W.A. Horan, Chief Investment Officer—Fixed Income, recently sat down with Louisa M. Ives, Head of Manager Research to discuss current economic conditions and Chilton Trust’s outlook for fixed income markets this year.
L: As we think about the outlook and investment opportunities for 2019, what are your expectations for global growth?
T: We’re seeing a slowdown globally as we start 2019. Last year was a year of synchronized global growth right from the beginning. In the end, it did not actually come to fruition, and the seeds for the slowdown that we’re seeing this year were already sowed. We are certainly seeing additional weakness in Europe, in Asia and even here in the US. In Europe, it’s coming from an outright recession that’s happening in Italy and a marked slowdown in Germany, which has been the lead economy in Europe. Germany has been much more affected by the slowdown in China than what was originally thought. One third of Germany’s GDP is net exports. We’re also seeing some big concerns with what happens to Europe internally after Britain leaves at the end of March. So, those questions are really preoccupying what’s going on in Europe right now. Having just ended their version of quantitative easing at the end of December, the European Central bank will no longer be buying bonds.