AQR Capital Management examines how unusually high macroeconomic uncertainty is today and whether it is likely to fade or persist. The author uses quantitative indices and current policy tradeoffs to argue that uncertainty will probably stay elevated. He then explores what that means for traditional assets and where diversifying alternatives may add resilience.
Certainly Uncertain
AQR
Jordan Brooks
Research
11 Pages
Key Takeaways
Persistent macro uncertainty: Quantitative measures and central bank tradeoffs point to elevated and enduring uncertainty rather than a quick normalization.
Volatility and outcomes: High macro uncertainty coincides with choppier markets and a very wide range of possible equity and bond results.
Diversify beyond equities: Balanced mixes of stocks bonds commodities plus trend and macro strategies can help portfolios weather different macro shocks.
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