The Fracturing of the Global Economy

FOR NEARLY FOUR decades, globalization created a highly supportive backdrop for investors. Expanding trade, integrated supply chains, lower production costs, and the free movement of labor, capital, and goods contributed to disinflation, steady growth, declining interest rates, and rising asset valuations. Multinational corporations benefited from scale and global reach, and traditional portfolio frameworks such as the 60/40 stock-bond allocation delivered strong risk-adjusted returns.

Today, those assumptions are being challenged. The global economy is entering a more fragmented, multipolar era shaped by geopolitical competition, strategic industrial policy, divergent demographics, and structurally higher inflation. Resilience increasingly is taking precedence over efficiency, regional supply networks are gaining importance, and national security, self-sufficiency, and strategic autonomy have become central to policymaking.

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