Assets in portfolio should be counter-cyclical to each other: Kaustubh Gupta

economictimes.indiatimes.com:

Kaustubh Gupta, Co-Head – Fixed Income, ABSL AMC, says “post Covid, change has become even more pertinent, in the sense that for the first time, the uncertainties on economics, geopolitics, fiscal response and the impact of monetary policy response is paramount and which is why at least as far as the global platform is concerned, we are living in a little bit of uncertain, uncharted territory which opens both opportunities for India and threats for India.
On global economy & India’s position in it
Kaustubh Gupta: We think that we have this ability to predict the future, but we are living in a bit of an uncertain environment. So, when Dr Krugman and Larry Summers were on opposite sides last year and what actually played out in 2023 was in nobody’s radar. The global economy was expected to slip into recession because of the unprecedented rise in interest rate, but 2023 turned out to be a lot more resilient.

And the Fed has been consistently getting it wrong in the last four years, both in terms of their projections of growth and inflation, despite having hundreds of economists in their research book. Now, all these are testimony to the kind of uncertain environment that we are living in and which is why I will agree with to some extent with Dr Krugman that the macro environment in current regime is actually a little bit of untested waters and the real reason is because for the first time in the history of finance, in the post Covid world, both monetary and fiscal policies are talking to each other in the same