Creand Asset Management anticipates a slowdown without recession and favours quality assets to navigate volatility
The firm believes that the new tariff framework, driven by the Trump administration, remains a short-term risk—though much of it is already priced into the markets.
The firm maintains a cautious stance on equities following a solid earnings season, noting early signs of downward revisions to earnings expectations in both the US and Europe.
Creand Asset Management, the fund management arm of the Creand Group in Spain, expects the macroeconomic environment to stabilise over the coming months. While it anticipates a moderation in growth during the second half of 2025, the firm does not foresee a global recession, although it remains alert to fiscal and geopolitical risks. The new tariff framework, introduced under the Trump administration, is still viewed as a short-term risk.
On the geopolitical front, the firm notes that Europe could benefit from increased international capital flows, particularly if political and fiscal stability on the continent continues. Regarding the conflict between Israel and Iran, Creand Asset Management highlights three key risks to monitor should tensions escalate: potential damage to oil infrastructure; disruptions in the Strait of Hormuz; and any signs of possible regime change. The firm believes the most likely consequence would be a modest uptick in inflation, albeit less pronounced than previous projections that factored in the impact of tariffs. Nonetheless, it considers the situation manageable, provided oil prices do not remain persistently above $90 per barrel.
Creand Asset Management also notes that the latest inflation data suggest it will prove more persistent and long-lasting than central banks and investors had previously anticipated. As a result, prices are unlikely to follow the rapid, linear decline that was once expected. Following the ECB’s most recent meeting, which brought interest rates down to 2%, the firm’s base case is that there will be no further cuts throughout 2025, unless an unforeseen shock forces the central bank to act. As for the Federal Reserve, the firm believes that—barring a sharp slowdown in the US economy—interest rates will also remain unchanged, likely holding at 4.5% through the end of the year, supported by ongoing labour market strength.
Luis Buceta, General Manager of Business and Investments at Creand Asset Management, explains that “the scenario currently priced in by the market—a soft macroeconomic slowdown, controlled inflation and aggressive rate cuts—strikes us as highly unlikely. Tightermonetary policy is having an increasingly pronounced impact on consumption, while the labour market remains resilient, making inflation even harder to contain. That said, the growth of the US economy continues to surprise on the upside. We advocate for active, cautious management focused on quality assets, along with diversification (both by asset class and by region) as the best way to navigate a complex but opportunity-rich environment”.
Tariffs: less noise, but more impact
The recent easing of tariff rhetoric has brought a degree of calm back to financial markets, but tariffs remain a significant threat. In recent weeks, market attention has focused on the so-called “TACO Trade” (Trump Always Chickens Out). However, the impact of already implemented measures should not be underestimated, as they create an environment of uncertainty, raise the risk of increased regulatory pressures and may lead to a higher risk premium for foreign companies. In addition, they could weigh on foreign direct investment and put downward pressure on the US dollar.
In the current environment, Creand Asset Management notes that although markets are taking an optimistic view on the potential for a de-escalation in trade policy, existing tariffs continue to represent more of a risk than a catalyst. Their impact could become more visible in the coming months, particularly in corporate margins and consumer spending.
Equities: caution while awaiting earnings
Creand Asset Management maintains a cautious stance on equities following a solid earnings season—though signs are already emerging of downward revisions to earnings expectations in both the US and Europe. As a result, the firm continues to hold an underweight position, awaiting greater clarity on corporate profits and consumption trends. In this environment, the strategy remains focused on defensive, high-quality assets, with a clear preference for developed markets underpinned by strong fundamentals. Miguel Ángel Rico, Investment Director at Creand Asset Management, notes that “although market sentiment has improved, we remain selective. Consumers have yet to fully absorb the impact of tariffs, and corporate earnings could come under pressure in the coming quarters. That is why we prefer to remain slightly underweight for now, and look to take advantage of potential entry points as visibility around margins and private spending improves”.
The firm acknowledges increased investment flows into Europe (particularly Germany), but believes it is still too early to call a definitive shift in trend away from the US, whose economy continues to show resilience. For this reason, Creand Asset Management prefers to remain cautious and is not increasing exposure to cyclical sectors or emerging markets, which remain burdened by tariffs and the economic fragility of China. That said, the weaker US dollar is proving to be a supportive factor.
Fixed income: attractive yields in the middle of the curve
The current environment of high interest rates and mounting fiscal pressures has created compelling opportunities in the middle of the yield curve, particularly in the 5- to 10-year segment. Creand Asset Management notes that investors are demanding higher risk premiums on sovereign debt, as reflected in the weak demand observed in recent auctions in the US, Japan and Germany. In this context, the firm’s strategy focuses on capturing higher yields by prioritising high-quality corporate bonds and avoiding more cyclical segments of the market. This view is further supported by the increasingly restrictive stance of major central banks.
Miguel Ángel Rico, Investment Director at Creand Asset Management explains that “our strategy aims to capture attractive yields by prioritising quality corporate credit, while maintaining a cautious approach towards more cyclical sectors. Also, while some monetary easing is expected over the course of the year, we believe the market has yet to fully price in key structural risks”.
On the currency front, Creand Asset Management anticipates a weakening of the US dollar over the medium to long term against other major currencies such as the euro and the yen.