Trade risks exacerbate late-cycle pressures
The U.S. and global business cycles are maturing.

■ The risk of U.S. recession remains low, but late-cycle pressures such as tight labor markets and monetary tightening have been on the rise.
■ Corporate tax cuts have boosted U.S. markets and partially offset these late-cycle pressures, but their effects are likely to fade while monetary policy grows tighter.
■ China has begun to ease policy amid growing economic weakness, reflecting a maturing global business cycle.
■ Rising trade risks reinforce late-cycle conditions by amplifying inflationary and profit-margin pressures.
■ Relative performance among asset classes has been less consistent during past late cycles, implying smaller cyclical allocation tilts and an emphasis on diversification.

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Courtesy of Fidelity Investments

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