Epoch Investment Partners explores whether the post-COVID recovery is truly “normal,” arguing markets face a mid-cycle environment shaped by slowing policy support, persistent inflation uncertainty, and accelerating digital transformation. The paper challenges the idea of a clean expansion, suggesting growth risks are skewed lower while equity returns may remain muted despite strong structural tech tailwinds.
Quarterly Capital Markets Outlook
Epoch
William Priest
Research
23 Pages
Key Takeaways
Growth Risks Skewed Down: Fiscal impulse shifts from tailwind to headwind, with policy support fading after contributing materially to GDP growth during the early-cycle rebound.
Inflation Range Wide: Wage pressures and rents complicate forecasts, with multiple plausible inflation paths through 2022 rather than a single “transitory” outcome.
Digital Economy Expansion: Only 18% of digital potential realized, yet digital platforms could represent majority of market cap by 2025.
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