The global investment landscape has reached a definitive pivot point, marking the end of the post-Global Financial Crisis era where "monetary fuel" provided a reliable tailwind for all asset classes. We have entered a "multi-speed" growth regime defined by the industrialization of Artificial Intelligence and a structural shift toward fiscal dominance. We have moved into a new era defined by a shift from a global savings glut to what is now called a savings grab. This means that capital is no longer abundant or cheap. Instead, it is being pulled in many directions to fund a massive build out of artificial intelligence, the strengthening of national defences, and the rebuilding of supply chains that are no longer global in nature.
While the United States (US) remains a powerful engine of growth, the world is being tested by severe tensions in the Middle East and a world trade system that is splitting into competing parts. A major event in the first half of the year was the closure of the Strait of Hormuz. This small stretch of water is a single point of failure for the world economy because it handles 20% of the world petroleum supply and essential materials for making computer chips. Even though a diplomatic end to this conflict is expected, the damage to trade routes and the sudden jump in prices have forced central banks to keep interest rates higher for longer.