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Citi’s “Slow then grow” forecast anticipates sector-specific recessions will dissipate by next year and inflation rates will decrease to a more favorable rate of around 2.5%. This projection aligns with recent comments made by Jerome Powell at an IMF conference in Washington DC last month, where he addressed global economic challenges.
In light of these projections, Citi recommends investors capitalize on the current high bond yields before anticipated rate cuts by the Federal Reserve. Their strategy suggests diversification across sectors that show resilience and growth potential, even in the face of widespread investor pessimism which has recently led to significant losses for some. Citi highlighted industries such as cybersecurity, semiconductor manufacturing—with ASML (AS:ASML) noted as a key player—energy production, and medical technology as areas for potential investment growth.
The advice from Citi comes after a downturn that saw early exiters from investments approximately down by about 15%, indicating a cautious optimism for those willing to stay invested in selected sectors despite the broader economic slowdown.
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