Wealth Outlook 2024 - Slow then grow

Geopolitics and elections: assessing risk in 2024 30 Wealth Outlook 2024 | Our outlook FIGURE 4 Federal Reserve Bank of Philadelphia Partisan Conflict Index Recession Philadelphia Fed Partisan Conflict Index 300 200 100 0 1985 1990 1995 2000 2005 2010 2015 2020 Source: Haver Analytics through November 8, 2023. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. Past performance is no guarantee of future results. Real results may vary. There are many other “manmade” risks to consider as well. Country-level risk is likely higher than usual. Key political elections loom at a time when recent surges in inflation have driven popular dissatisfaction. (See FIGURE 6 , and our regional essays for more, starting on page 105 . ) General elections loom in the year ahead for countries whose equity markets comprise 68% of global market cap. However, nearly all thatmarket cap – 62%– is in theUS. One doesn’t need to be partisan to see signs of dysfunction in US governance. It took a record 15 ballots to elect a speaker of the House of Representatives in early 2023 (a position second in line to succeed the US president). It took only one vote to remove the speaker following his willingness to cooperate with the opposition party to avoid a US government shutdown. The US election of 2024 will almost certainly bring partisan conflict to new heights ( FIGURE 4 ). The US presidential election is approaching. At present, polling data are too close in our opinion to be of much value at this point. As discussed in North America: an emerging set of new opportunities on page 126 , the US electorate often votes to keep the US government divided. Right now, a Democrat sits in the White House and Republicans control the House, with Democrats maintaining slim control over the Senate. Legislation needs consent of both chambers, including giving the president additional authority to fund Ukraine or provide support to Israel. Soon after the election of 2024, the US debt ceiling will also no longer be suspended.