BlackRock's Wei Li: Fed Won't Be Able to Cut Rates in 2023

The video discusses the shift in asset allocation due to a new economic regime, highlighting the need for a new playbook. It forecasts a recession with potential inflation surprises, emphasizing central banks' limited ability to cut rates. The market is shaped by supply constraints, aging demographics, and geopolitical fragmentation. The video advises caution with long duration bonds and analyzes China's economic outlook, suggesting a higher risk premium due to lower growth and less efficient macro-to-micro transmission.

What is the main reason for the need to rethink asset allocation in the new economic regime?

• Supply constraints and inflation

• Decreased consumer spending

• Increased global trade

• Technological advancements

Which structural factor is NOT mentioned as contributing to long-term inflation?

• Net zero transition

• Aging demographics

• Geopolitical fragmentation

• Technological innovation

Why are markets pricing aggressive rate cuts despite persistent inflation?

• Expectations of central banks' intervention

• Decreasing energy prices

• Improved supply chain efficiency

• Increased consumer confidence

What is the expected trend for China's economic growth according to the leadership change?

• Higher growth due to increased exports

• Rapid growth driven by foreign investments

• Stable growth with a focus on technology

• Lower trend growth with a focus on social coherence

How does the new focus of China's leadership affect the transmission mechanism from macro to micro?

• It accelerates economic growth

• It becomes more efficient

• It remains unchanged

• It becomes less efficient