PGIM Multi-Asset Solutions’ Second Quarter 2025 Outlook examines the fundamental shifts transforming global markets following uncertainty around US policy. As recession probabilities rise and stagflation risks emerge, institutional investors face a challenging but potentially opportunity-filled landscape that may reward both defensive positioning and tactical agility.

Our comprehensive analysis provides institutional investors with actionable insights across public and private markets, highlighting potential opportunities as market leadership broadens beyond mega-cap technology. From strategic fixed income positioning to selective international exposure, we identify key themes that will likely influence portfolio performance in the months ahead.

The outlook features:

• Findings from PMA’s proprietary recession probability model showing the dramatic rise in economic risk
• Perspectives across equities, fixed income and alternatives
• Strategic approaches to navigating potential stagflation scenarios
• Analysis of emerging opportunities in non-US markets as the US "Exceptionalism" narrative fades
• Four critical questions every institutional investor may want to consider in the months ahead

PMA’s multi-asset Portfolio Research team offers a balanced perspective on navigating this pivotal market transition, providing the insights needed to help position portfolios amid increasing volatility and changing correlations.