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The BlackRock Investment Institute expects risk assets to do well in 2020, although the gains are expected to be a lot less than the double-digit returns of 2019.

The global growth is seen edging higher this year, limiting recession risks. While that is a favorable backdrop for riskier assets, big gains could remain elusive, as the dovish central bank pivot that powered the 2019 rally is largely behind us and inflation risks look underappreciated, said BlackRock analysts, according to Bloomberg.

The equity markets rallied sharply in 2019 with the S&P 500 rising by 30% as three 25 basis point rate cuts by the US Federal Reserve cushioned markets against the US-China trade tensions.

The Fed in December confirmed a rate cut pause for 2020 and cited persistently higher inflation as a pre-requisite for rate hikes.