Global Decoupling: The Biggest Threat to Financial Markets

Nicolai Tangen, CEO of Norway's $1.8 trillion sovereign wealth fund, warns of a fragmented world economy, posing risks of low growth and high inflation. Despite volatility, markets remain flat, while resilient companies can withstand pricing pressures. Tangen fosters AI in fund operations for effective management.

The global economy is facing the risk of fragmentation, presenting significant threats to financial markets, according to Nicolai Tangen, CEO of Norway's $1.8 trillion sovereign wealth fund. This decoupling scenario could lead to low economic growth and high inflation, creating increased market uncertainty.

In an interview, Tangen expressed concerns over various ongoing conflicts—hot, cold, trade, and tech wars—between superpowers. These tensions contribute to economic friction and potential market destabilization. Despite recent volatility, the markets have remained unchanged over the year, defying expectations.

The focus now shifts to companies' ability to handle price pressures, either through competitive pricing strategies or supply chain flexibility. Tangen is committed to enhancing fund operations through artificial intelligence, emphasizing continuous improvement in efficiency and risk management.

(With inputs from agencies.)