Long or short, Larry Adam? Six market views from our Chief Investment Officer for Wealth Management in the Americas and Chief Investment Strategist for Deutsche AWM Americas Is Fed policy at risk from sharply increasing inflation? Core U.S. inflation is still running below the Fed's 2% target. As the U.S. economic recovery firms, core inflation will move up but will take some time to get back to target. Very stable inflation expectations will help to slow any rise, as will a strengthening U.S. dollar's impact on input prices. The rate at which U.S. labor costs rise is likely to be relatively modest, too. All this will help the Fed to keep rate hikes on a well-considered path Is the ECB fully committed to quantitative easing (OE)? 11020 Earlier this year, when European growth showed signs of picking up. many wondered whether the ECB would complete its QE program. Recently, rather mixed economic data -and Greece - has underscored the problems that the Eurozone still faces. In fact, the ECB has moved to extend the range of assets availab€e for CIE purchases to give it more firepower if needed, should further threats arise from Greece or elsewhere. U.S. high-yield over euro high-yield? ® The high weight of energy stocks in U.S. high-yield debt must be of concern, with oil prices obstinately low. But other measures of U.S. high-yield debtors are healthy. This is also a much bigger market than euro high-yield, which should reduce any future liquidity concerns. pattitqls Faro aa'btPtiwa Irrrattincrit vuWC ihtts AsiceNlas paSpa.tioall fr. tr. Hve,43rovicivi Are emerging-market equities looking more attractive? stir History suggests that a Fed tightening cycle does not necessarily disrupt bull markets in equities. However, when valuations are stretched (as now) developed-market returns can be relatively modest. Even so, emerging markets may not be a good alternative. These markets are likely to be more vulnerable to Fed rate hikes and i