How has market volatility shaped strategic asset allocations?

The current period of heightened market volatility has caused investors to demand more compensation to take on risk. Persistent inflation and sharp, short swings in economic activity are driving the turbulent market. As a result, BlackRock’s strategic views have already been positioned for a high inflation risk premium. Market volatility has also been exacerbated by the transition to net-zero. BlackRock predicts supply shocks and regional divergences to make the transition to net-zero more difficult than expected.