Transitioning to a New Paradigm

Adjusting to an uncertain future

Arif Husain, Head of International Fixed Income; Sebastien Page, Head of Global Multi-Asset; Justin Thomson, Head of International Equity

T. Rowe Price, June 2022

Key Insights

Russia's invasion of Ukraine, COVID-19 lockdowns in China, higher energy prices, and rising interest rates could make the second half difficult.
A spike in bond yields punished equity valuations in the first half. The question now is whether an earnings slowdown will be the next shoe to drop.
U.S. Treasuries and other core bonds didn’t offer much diversification in the first half as equity correlations jumped. New approaches may be needed.
War in Ukraine and sanctions against Russia could continue pushing commodity prices higher but also could accelerate a shift to renewable energy.