Capital Market Expectations in Today's Economy

In the current economic environment, investors face various challenges and opportunities that shape their capital market expectations. Assume you are a portfolio manager tasked with adjusting client portfolios in light of these developments.

Discuss the key factors that influence capital market expectations in today’s economic landscape. In your response, evaluate the potential impacts of interest rate fluctuations, inflationary pressures, and central bank policies on equity and fixed income markets. Additionally, provide recommendations on how these factors should be incorporated into investment strategies for long-term growth.