WRITE A RESPONSE TO THE FOLLOWING

BlackRock lowered its global growth outlook, based onexpectations that trade and geopolitical frictions will continue.The outlook for U.S stocks remains positive, and the firm upgradedEuropean stocks from negative to neutral. Bolvin believes thattariffs are making costs higher for corporations and forcing somecompanies to change their supply chains altogether. The U.S economyis adjusted for a lowered pace of growth, at about 1.8% in thesecond half of the year. The firm said central banks are respondingto the weaker outlook, and are loosening policy, creating aconstructive environment for U.S. and European stocks. The firmsaid central banks are responding to the weaker outlook, and areloosening policy, creating a constructive environment for U.S. andEuropean stocks. This outlook weakens the economy as a result ofthe geopolitical and trade frictions. In turn it has increases thepotential for easier policy by central banks, including the FederalReserve and European Central Bank. Bolvin, head of the BlackRockInvestment Institute, states “China has become less positive , as aresult we were expecting in Europe is not in the cards anymore. Itis a downgrade in the broader global picture, and it is directlydriven by European and China view.” The firm believes that it isrisky but central banks are providing a backstop. BlackRockupgraded emerging market debt but no longer favors emerging marketequities, lowering them to neutral from overweight as the outlookfor global growth dimmed. The BlackRock investment Institute hasdowngraded its global growth outlook for the second half, and whileit is still sees a good environment for U.S. stocks, it no longerfavors market equities. There is a lowered risk of recession, basedon that the market looks constructive for the next few months. Forthat reason, inflation could be a surprise the markets aren’texpecting, at some point after this year.