Each year the Anfield investment team undertakes a comprehensive economic forecast for the following calendar year. The process begins with a 2-day gathering of Anfield staff and select expert colleagues from other firms. The results of that 2-day gathering were previously circulated in the form of 2022 global themes and wild cards. The second part of this annual process is the derivation of specific macro-economic forecasts outlined below. From here, Anfield will develop capital market expectations and then reformulate investment strategies designed to capture the opportunities we see, and importantly to avoid or limit areas of risk going forward. We expect the entire process to be completed by mid-January and will circulate and implement our findings as soon as possible.
To summarize our 2022 macro-economic forecast, the team evaluated factors such as Fed Policy, # of Rate Hikes, US GDP, US Unemployment, and ECB Policy, amongst others. Broadly speaking, we see a world where major central banks look to increase rates from a policy perspective (perhaps 2x within the United States) amid increasing inflationary pressures, in addition to implementing balance sheet related measures such as asset purchase tapering or even outright balance sheet reduction. In addition, economic growth continues to improve as the developed world learns to live with COVID. In our view, 2022 looks to be similar to 2021 when looking at risk assets. Debt markets will likely continue to be challenged and we believe there remain opportunities to achieve alpha within the equity market. Items we are watching closely include the US unemployment situation (the other supply chain issue), the developing composition of the Fed, and inflationary pressures on the US Consumer.
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While many of the thoughts expressed in this report are stated in a factual manner, the discussion reflects only Anfield Capital’s beliefs about the financial markets in which it invests portfolio assets following the models. The descriptions herein, are in summary form, are incomplete and do not include all the information necessary to evaluate an investment in any model. The models described represents current intentions. However, Anfield Capital may pursue any objectives, employ any techniques, or purchase any type of financial investment that it considers appropriate for the models and in the best interests of its clients.
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