The global financial landscape has entered a new era of profound uncertainty, demanding a re-evaluation of long held investment and policy assumptions. For decades, investors were guided by relatively stable economic principles, but today, traditional playbooks are being redrawn. This variability is driven by a confluence of powerful forces: an increasingly unpredictable U.S. policy environment, persistent inflation fueled by protectionist trade measures, the potential emergence of sovereign risk in advanced economies, geopolitical conflicts, and rising political pressure on central bank independence.
Despite all these drivers of volatility, equities have continued to set record highs and credit spreads have continued to grind tighter. At the same time, this volatile environment is accelerating a structural shift in capital markets, pushing private markets from the periphery towards the core of institutional portfolios. These converging trends represent the "shifting sands of global finance," requiring investors and policymakers alike to navigate an increasingly complex and unfamiliar terrain.
Source for all data points: PGIM Quantitative Solutions, September 2025
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