A year of caution

Liquidity tightening will affect financial assets

The investment outlook for 2022 is mixed. Global growth could plateau as base effects from the recessionary 2020 wear off, inflation is sticky, and the pandemic continues. The Federal Reserve has said it will accelerate the pace of its ongoing taper and hike policy rates. Other major central banks are likely to adopt similar policy measures, cutting down liquidity and triggering higher bond yields. While the US could see strong growth rates driven by its infrastructure development plans, China is expected to deliver lower growth as it focuses on emission control and tightens the regulatory grip on real estate and