State Street Corporation: Investor optimism for risky assets may have been excessive.

Dwyfor Evans, head of macro strategies for the Asia-Pacific at State Street Global Markets, pointed out that investor confidence in high-risk assets may have become excessive. He stated at the Asia Securities Industry & Financial Markets Association Asset Management Conference in Singapore that current investors are buying U.S. stocks while hedging against dollar risk exposure and selling U.S. Treasuries. Evans expects U.S. inflation to gradually rise as prices for imported goods and domestic products both increase, and noted that “3% has become the new 2%.” He added that this is crucial for the Fed—if the number of rate cuts decreases, the dollar may rebound. Given the persistently high policy uncertainty, Evans warned that current market risk positions may be overly optimistic.