A risk-off tone was prominent this week in markets amid rising worries of stagflation, given aggressive monetary policy. Despite the solid U.S. retail sales data, retailers led a sharp decline in equities mid-week, which pushed U.S. Treasury yields lower.

European gas disruptions led the euro to depreciate against the dollar, while U.S. inflation data buoyed stagflation fears and expectations of aggressive Fed tightening. In China, renminbi weakness continues, given more hints of policy easing.

Concerns over companies’ profit margins continue to mount as the U.S. economy faces the highest inflation since the 1980s. However, we find that some sectors’ margins actually increase in high inflation.

And that’s on top of the other risks from war aims that are turning ever more resolute, expansive, and vague.

The FOMC raised the Fed funds rate by 50bps and announced the beginning of quantitative tightening. Chairman Powell signaled that 50bps hikes will be the new normal for the next couple of meetings, as inflation fears remain. The BoE and ECB also contemplate their paths ahead.

Inflation is outpacing wages in both Europe and the U.S., households are becoming poorer. How long before they start cutting spending and growth sputters?

Richer, older, developed countries face slowing population growth, while poorer, younger, developing countries face faster growth. Successful investments could boost standards of living in these developing countries, aiding demand for goods, housing, transportation, and more.

Avoiding a disruptive cutoff of Russian energy supplies has helped maintain overall economic strength. However, a future phase-out of Russian oil raises concerns about inflation and economic activity.

In a deeply uncertain world, there is one certainty. Young, booming populations in emerging markets (EM) have started outpacing those in aging, rich countries and might provide just the opportunity needed to fill job openings and support growth.