Christopher Dembik, Pictet Asset Management;
Credit: Chronicle.lu
On Tuesday 9 September 2025, Pictet Asset Management held a Mid-Year Outlook event at the Hôtel Le Royal in Luxembourg-ville entitled "Certainly Uncertain!".
Christopher Dembik, Senior Investment Strategy Advisor within the France-BeLux Distribution team, addressed the questions: "Are we past the peak of tariff volatility? Will the USD downtrend endure, and the Middle East powder keg further explode? Uncertainty clouds the outlook". He shared his market convictions and pointed out how investors can transform uncertainty into opportunity.
Pictet Asset Management's Karel Vanhuysse welcomed around 50 invited guests the event, and highlighted the recent "massive increase in public debt", introducing the speaker who holds a Masters in International Relations from Sciences Po Paris, and an MBA in Business and Economics from Poland’s Academy of Science.
Christopher Dembik opened by explaining that, in Europe, public debt is establishing, but is rising sharply in developing countries. He mentioned four structural forces at work: fiscal dominance, demographics, declining trust in institutions and geopolitical freedom.
He talked about increasing political radicalisation and xx, with heavily indebted countries needing a constant flow of liquidity (to avoid financial crises). He said that we need to control public debt, with a yield curve in the US seemingly unavoidable. In 1947, the Fed held almost 100% of Treasury bills (short-term securities); after the recent "Liberation Day", a similar trend has happened with the Treasury purchasing around $10 billion of bonds in the past three weeks. He recalled a similar trend happening in France at the beginning of this year.
He talked about creating a new demand, with the supply of Treasury bonds being crucial. The GENIUS Act in the US (Guiding and Establishing National Innovation for US Stablecoins) is a regulatory framework legitimising an ecosystem of stablecoins back by US dollars, creating a new demand and which is twice a much as Japan.
He revealed that the US economy has been in recession since May 2025; he talked about economies now based on intangible assets, no longer on oil and metals, etc. (tangible assets). In terms of asset allocation, there are less government bonds nowadays (they help mitigate the impact of recession).
He also looked at the performance of the US dollar going back a decade and said that he feels that the US dollar will remain the world's leading currency "for a long time to come". He also explained why he believes that Trump is not a break with the past, but a continuation, basing his reasoning on protectionism.
He also talked about China, stating their their credit impulse has reached its highest level since the post-Covid boom, and revealed that some countries are more vulnerable than others. He said that France's public debt can be compared most closely to Italy, not Germany.
He also revealed that each time the Fed cuts interest rates, there is a positive return within twelve months.
He then talked about knowing which companies are interesting (for investment) and said that they are still investing in tech companies, with Nvidia standing our in the production of semiconductors; he also mentioned Meta, Alphabet and others. On AI, he said that he believes that it will take a long time to increase productivity. Under "Trump 2.0", environmental stocks re performing well in the US, with tax credits until 2023; the US has passed a law closing the market to foreign companies, resulting in environmental stocks performing well.
He addressed good debt versus bad debt, liking environment stocks in local currencies.
He concluded by stating that reducing public debt seems to be impossible as developed countries have entered a phase of fiscal dominance, describing it as the most important structural factor for the global economy and investors. He stated "Based on prior experience, fiscal experience is very bullish for equities", explained that he feel it is "time to rethink the 60/40 portfolio".
