A Global Economic Reset

Insights from 4 Economists at Coffee with the Economists

As global markets navigate an era of transformation, family offices reassess their investment strategies to stay ahead of evolving economic conditions. At GPFO’s latest Coffee with the Economists, four leading macroeconomic minds provided critical insights into the forces shaping the global economy; inflation, interest rates and policy shifts were all on the table.

Session Chair: Dr Michael J. Oliver

Guest Economists: Dr Gerard Lyons, Dr Jörn Quitzau, Rory Green & Anatole Kaletsky.

The full recording of the session is available at the base of this post for members & subscribers.

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A New Economic Paradigm: The End of the 2010s Model

Anatole Kaletsky, Chief Economist at Gavekal, set the stage with a bold assertion: the five-year period of economic chaos—marked by COVID, supply chain disruptions, geopolitical shocks, and inflation swings—is now giving way to a new normal. However, this ‘normal’ won’t resemble the low-inflation, low-interest-rate world of the 2010s.

Kaletsky outlined three key shifts:

• Inflation has found a new floor – Rather than targeting inflation below 2%, central banks now see 2% as a minimum. The Federal Reserve and ECB have subtly adjusted their stance, signalling that they will tolerate moderately higher inflation to sustain growth.

• Higher-for-longer interest rates – The ultra-low rates of the past decade are unlikely to return. Instead, real interest rates are expected to remain in the 1-2% range, requiring investors to adjust their portfolio strategies accordingly.

• A fundamental rethinking of risk – Investors remain heavily hedged against recession risks, but Kaletsky argues the greater long-term threat is under-hedging against inflation, which erodes purchasing power permanently.

For family offices, the takeaway is clear: traditional portfolio structures built for the 2010-2020 era may need significant adjustments to account for higher inflation and a more normalized interest rate environment.