Capital Market Expectations in Economic Analysis

As a portfolio manager, you are tasked with developing capital market expectations to guide asset allocation decisions for your clients' portfolios. In light of current economic conditions, including inflation rates, GDP growth forecasts, and employment trends, outline the key components that should be considered when forming these expectations.

Additionally, discuss how these economic factors may influence expected returns for equities and fixed-income securities for the next 5 to 10 years. Provide a rationale for your projections, referencing specific economic indicators where appropriate.