Observations from the Milken Institute Global Conference

Concerns over the U.S. economic trajectory, and growing chances of an imminent recession fuelled by White House trade policies were major topics at the Milken Institute Global Conference in Beverly Hills, California.

The mood on the ground was decidedly chilly. Several asset managers pointed to the fact there was one delegation missing altogether from the conference: large investors from China.

Trump’s erratic policymaking

• Market uncertainty caused by U.S. President Donald Trump's erratic policymaking and aggressive stance on tariffs hung heavily over an investor gathering in Los Angeles this week, with many saying it is time to pivot to non-U.S. assets for more clarity.

  
  

Europe as an alternative

• The search for alternative geographies was a major theme at the event.

• The U.S. economy's size and depth of its capital markets left few viable alternatives for a dramatic shift away from American assets.

• Many, however, said the volatility was pushing them to consider higher allocations to non-U.S. markets, Europe in particular.

• Contributing to the shift are Europe's improved growth prospects and lower asset valuations.

  
  

U.S. Treasury Secretary Scott Bessent

• U.S. Treasury Secretary Scott Bessent sought to calm event attendees, noting in a speech that betting against America was a time-tested mistake.

• Several bankers said in interviews that the market's current enthusiasm, and recent recovery, may be premature and that it would take little, like a comment from China on stalling trade talks, to send stocks lower again.

• Concerns over a tariff-induced slowdown and a prolonged trade war with China have kept investors on edge.

U.S. fiscal outlook

• A less urgent but also prominent concern was the U.S. fiscal outlook, with the prospect of rising government debt feeding doubts over the long-term safety of U.S. assets.