Mikio's central observation is that US interest rates are close to equilibrium for the first time in roughly a decade. The ten-year Treasury yield is in the 4.5% range, which aligns broadly with nominal GDP growth of around 5%. He believes this is healthier than the era of near-zero rates, which fueled excessive financialization, or the high-rate environment of the 1970s, which brought frequent recessions. The key question is whether rates will remain at this level. Any renewed upward pressure would warrant additional caution, particularly for the more leveraged segments of the market.

Regarding equity markets, Mikio emphasized the concentration risk inherent in the current artificial intelligence and data center investment cycle. In this cycle, capital expenditure decisions made by a few large technology companies have a ripple effect across a broad network of semiconductor and hardware suppliers. In response, LGT Capital Partners has reduced exposure to technology-heavy indices. The firm favors companies that provide broader enabling infrastructure, such as energy, industrials and defense, over those directly exposed to near-term scarcity dynamics in semiconductors and specialized memory.

Within the fixed-income sector, LGT Capital Partners maintains an underweight position on duration in developed markets, reflecting the belief that inflation will persist. However, within the bond allocation, emerging and frontier market debt are seen as areas of relative opportunity where pressures on developed-market bonds are less pronounced.

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