Markets are bracing for an 18-month period defined by tariff shockwaves, uneven inflation figures, and a rapid expansion of artificial intelligence investments, according to Bentham Asset Management’s chief investment officer Richard Quin. He noted a significant shift in market dynamics, with global tariff rates surging to an average of 18 per cent, nearly double market expectations. Bentham Asset Management is a specialist investment manager focusing on generating sustainable, risk-adjusted returns for its clients. The company delivers investment solutions across various asset classes.
Quin cautioned that the increased tariffs are already affecting US economic activity, citing weakening labour indicators and softer payroll figures. He also pointed out that the extended US government shutdown has created a “data vacuum”, leaving the Federal Reserve with limited visibility on the economic landscape. Adding to the complexity, China continues to export deflation through excess capacity and loss-making exports.
According to Quin, the artificial intelligence revolution is now the primary market driver. However, he warned that the global $5 trillion AI build-out carries the risk of creating “zombies” within traditional industries. He highlighted Meta’s recent $US30 billion issue trading down as an unusual event.
Looking ahead, Quin anticipates multiple rate cuts in both the US and the UK. However, he expressed concern that strained fiscal positions may render fiscal policy procyclical and ineffective during an economic downturn. He expects inflation to remain unpredictable, with the integration of AI introducing further uncertainties into the economic outlook.
