Citi commissioned comprehensive macroeconomics and financial markets outlooks. Analysis of macroeconomic indicators, market trends, and financial data produced robust outlooks, with a 67.33% likelihood of positive macroeconomic and financial markets outcomes informing decision-making and asset allocation strategies.
The decision behind the question
Citi wanted macroeconomic and market outlooks that stated their own confidence, because directional commentary alone could not support asset allocation decisions.
Data and methods used
Macroeconomic indicators, market trend series, and financial data were modelled together, with forecasts reported as an expected path plus a range and an explicit likelihood attached to each scenario.
What the analysis found
- •The central scenario carried a 67.33% likelihood of positive macroeconomic and market outcomes.
- •A small number of indicators dominated the outlook, which made the forecast easier to monitor between updates.
- •Downside scenarios were driven by different variables than the upside, so a single watchlist was insufficient.
What changed as a result
Allocation discussions were framed around stated likelihoods and named drivers, and the monitoring list was split into upside and downside indicators.
Related work is grouped under Market Research, and the methods used here are described in more detail under analytical capabilities.
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