Q4 2023 was a very strong quarter for risk assets. Equities rose over 10%, while fixed income markets rallied significantly, leading to a positive year for both Investment Grade indices and the Bloomberg Global Aggregate Bond after they entered the quarter with further losses following the heavy drawdowns seen in 2022. This was driven by a significant easing in financial conditions, culminating with the US Fed indicating in their December meeting that they anticipate cutting interest rates during 2024. Inflation has fallen significantly and has done so without a feared economic recession. Nonetheless, we feel the Fed still has a difficult role; for the rally in risk assets to be sustained, they will need to balance monetary policy carefully, for easing conditions could lead to inflation reaccelerating and, alternatively, tightening too much could provoke a recession.