We're in a mid-cycle slowdown, says Invesco's Brian Levitt

Core Viewpoint - The current economic environment is characterized by a midcycle slowdown, which is seen as an opportunity for the Federal Reserve to lower interest rates, potentially benefiting risk assets [2][3][5]. Economic Indicators - Inflation expectations remain stable at 2.5%, while real yields are approximately 1.5% with a 4% Treasury rate, indicating weaker growth [2]. - Global leading indicators have been stable but below trend, suggesting a mega cap growth environment, with expectations for lower rates and fiscal support to boost global activity [5]. Market Dynamics - There is a shift in focus towards neglected market sectors, particularly value sectors compared to technology, which may require a catalyst such as policy easing and increased activity [6][7]. - The market is experiencing volatility, often linked to policy uncertainty, but a better risk environment with less volatility is anticipated as rate cuts and fiscal policies are expected to improve economic outcomes [9]. Future Outlook - The expectation is for a reacceleration towards trend-like growth rather than a new higher growth level, which should be conducive for risk assets [3]. - The potential for rate cuts and fiscal policy support globally is seen as a positive signal for the market, particularly towards the end of the year and into the next [8][10].