- Multi-Asset Strategist
United States, Intermediary
Change
highlight_off
Thank you for your registration
You will shortly receive an email with your unique link to our preference center.
The views expressed are those of the author at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.
Tariffs exceeded market expectations. Now what? Expect short-term volatility, identify concentrations, and consider using sell-offs as an entry point to diversify across regions and styles.
Overall, tariffs announced by the US administration on April 2 far exceeded market expectations. This is because while universal tariffs of 10% were lower than expected, “reciprocal tariffs,” especially in Asia, were higher than expected. China, Vietnam, India, Thailand, and Taiwan were particularly hard hit by reciprocal tariffs, with China's effective rate now sitting at 54% given an imposition of 20% earlier this year.
What could this mean for global investors?
The US is likely to see lower growth and higher inflation. As a result, the risk of a recession in the US is higher — I currently place it at a 50% probability — with the fallout affecting other economies across the globe to a varying degree. In the event that unemployment rates in the US rise, the US Federal Reserve (Fed) does have room to lower interest rates from its current rate of 4.5% but higher potential inflation will act as a constraint.
Other developed markets, most notably Europe and Japan, look increasingly attractive. While the US faces fiscal contraction, Europe is moving toward fiscal expansion — especially following recent policy shifts in Germany — with Japan also benefiting from fairly accommodative policy. Both regions offer relatively cheaper valuations than the US. Further declines in the US dollar would be a tailwind for the rotation into non-US developed markets.
How should investors react?
Review portfolios and identify concentrations – many portfolios are still quite concentrated in US and growth, yet the opportunity set may now be much more broad-based.
Clarify investment horizon and risk tolerance – longer investment horizons and a tolerance for risk give many investors more flexibility to use volatility as an opportunity. It may make sense even for investors with shorter time horizons to ride out the storm and avoid crystalizing losses that may get smoothed out over time.
Make a plan – not doing anything is a decision. It’s better to set a plan to become more diversified across regions and styles. With a longer horizon of a over a year, consider using sell-offs as good entry points to get those exposures.
Avoid negativity – there are potential mitigating factors in the current environment, including:
- the Fed’s capacity to cut rates;
- the relative robustness of company and household balance sheets, with most of the leverage sitting with governments;
- concerns about upcoming midterm elections in 2026; and
- potential upside from the sequencing of the Trump agenda. Tariff policies have come first, but we may also see further tax cuts and deregulatory moves in the US in the coming months, which could be stimulative and help shift investor sentiment.
Don’t lose sight of the relative winners – while US tariffs are a clear negative for the world economy, they may ultimately hasten a rebalancing of capital flows away from the US. If this were to materialize, we could see relative outperformance of European asset markets, given European policymaker efforts to ramp up structural spending in areas such as defense, infrastructure, and digitization. This period could also be a catalyst for European policymakers to accelerate their competitiveness and economic policy agenda, as outlined in the Draghi report.1 In addition, economies with policy flexibility will be able to cushion the adverse effects of tariffs.
What next?
Markets will remain volatile, so investors should expect continued whipsaw behavior, including the risk of further losses that might spread beyond equity markets.
While the administration hasn’t left much time for negotiation, countries around the world will be evaluating whether they negotiate or retaliate — potentially either mitigating or exacerbating damage to the US and global growth and inflation outlook.
While we would caution against major portfolio adjustments at this stage, we will be monitoring these developments closely, looking for attractive entry points that may emerge.
1 Mario Draghi, The Draghi report on EU competitiveness, European Commission, September 2024.
Expert
Related insights
Showing
of
Insights Posts
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
JPY intervention: what makes it so important this time?
Continue readingMultiple authors
event
5 min
Article
2027-02-25
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Portfolio construction and volatility management in 2026
Continue reading
event
5 min
Article
2027-02-28
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The soft underbelly of US foreign policy
Continue reading
event
5 min
Article
2027-02-01
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
18 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Monthly Market Review — December 2025
Continue reading
event
18 min
Article
2027-02-01
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The spending bubble driving corporate profits looks set to burst
Continue readingBy
event
5 min
Article
2027-01-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
3 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Oil: The real influencer in the Venezuela intervention
Continue reading
event
3 min
Article
2027-01-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
URL References
Related Insights
Get our latest market insights straight to your inbox.
highlight_off
Thank you for your registration
You will shortly receive an email with your unique link to our preference center
Read next
Showing
of
Insights Posts
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
JPY intervention: what makes it so important this time?
Fixed Income Portfolio Managers Sam Hogg and Ed Meyi and Investment Director Takashi Nakao explore what’s different about the unconfirmed but likely JPY intervention and why it matters for global investors.
Multiple authors
event
5 min
Article
2027-02-25
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Liquid alternatives & hedge funds
Private investing
Outlook
Multi-asset
Macro
Asset allocation
Portfolio construction
Risk management
Privates
USA
Article
Wealth Program
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Portfolio construction and volatility management in 2026
Multi-Asset Strategist Nanette Abuhoff Jacobson discusses adapting portfolios for 2026, focusing on diversification, hedge funds, and private markets.
event
5 min
Article
2027-02-28
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The soft underbelly of US foreign policy
Our experts discuss the US-EU financial dynamics amid Greenland tensions and analyze US foreign policy's vulnerabilities.
event
5 min
Article
2027-02-01
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
18 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Quarterly Market Review — 4Q2025
A monthly update on equity, fixed income, currency, and commodity markets.
event
18 min
Article
2027-01-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
18 min
Economic cycle
Market commentary
Monthly Market Review
Institutional Program
Macro and market
Equity
Fixed income
Multi-asset
Commodities
Liquid alternatives & hedge funds
Private investing
Article
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Monthly Market Review — December 2025
A monthly update on equity, fixed income, currency, and commodity markets.
event
18 min
Article
2027-02-01
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The spending bubble driving corporate profits looks set to burst
US corporate profits have been fueled by government deficits, low rates, and consumption — drivers now at risk, raising questions about the sustainability of market valuations.
By
event
5 min
Article
2027-01-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
3 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Oil: The real influencer in the Venezuela intervention
Multi-asset Strategist Nanette Abuhoff Jacobson details the role of oil in the recent events in Venezuela and shares the investment implications.
event
3 min
Article
2027-01-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
4 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Geopolitics in 2026: Risks and opportunities we’re watching
Geopolitical Strategist Thomas Mucha shares his outlook, highlighting conflicts to watch, the importance of national security, and investment opportunities.
By
event
4 min
Article
2027-01-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
2 min
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
FOMC: Easing into uncertainty
Fixed Income Portfolio Manager Jeremy Forster profiles the Fed's December rate cut, labor market trends, inflation pressures, and the role of anticipated changes to FOMC leaders in 2026.
event
2 min
Article
2026-03-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
5 min
Private credit
Private investing
Content CoE Program Global Program
Outlook
Diversification
Income
Interest rates
Privates
Article
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Private credit outlook for 2026: 5 key trends
Our private credit experts discuss five themes driving the asset class’s 2026 outlook, including public/private convergence, changing credit profiles, the growth of retail, and much more.
event
5 min
Article
2026-12-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
Article
14 min
Artificial intelligence (AI)
Economic cycle
Content CoE Program Global Program
Interest rates
Investment Angles
USA
Article
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
The rising tide of AI: How it could lift US productivity, growth, and profits
From an economic and market standpoint, a lot is riding on the future of artificial intelligence. Macro Strategist Juhi Dhawan sees plenty of reasons for excitement but also a need for patience along the way.
event
14 min
Article
2026-12-31
Archived
info
Archived pieces remain available on the site. Please consider the publish date while reading these older pieces.
URL References
Related Insights
contact us
legal Information
© Copyright 2026 Wellington Management Company LLP. All rights reserved. WELLINGTON MANAGEMENT ® is a registered service mark of Wellington Group Holdings LLP. For institutional or professional investors only.
Enjoying this content?
Get similar insights delivered straight to your inbox. Simply choose what you’re interested in and we’ll bring you our best research and market perspectives.
highlight_off
Thank you for joining our email preference center.
You’ll soon receive an email with a link to access and update your preferences.
Quarterly Market Review — 4Q2025
Continue readingBy