We have made several adjustments to modestly reduce the economic sensitivity of the Global Equity portfolio and keep U.S. sector exposures aligned with the continued evolution of our macroeconomic outlook. We expect moderate economic growth to continue in the U.S., but our outlook contemplates a deceleration in growth as the cycle continues to mature. We have already seen signs of slowing manufacturing and construction activity in 2019. Further, while we expect the consumer will remain a driver of U.S. economic growth, we believe it is unlikely that consumption growth can continue as strongly as it has in recent years. Consumer spending growth revisited cyclical highs in mid-2018, and investor expectations remain high, even as growth has begun to moderate. The portfolio adjustments described below reflect our view that U.S. economic growth will remain positive, while decelerating modestly, as well as sector-specific implications of our outlook. We are also taking the opportunity to conduct a full rebalance of portfolios.
Reduction of economic sensitivity: First, we have reduced exposure to the economically-sensitive U.S. Financials Sector and added a new exposure to the U.S. Utilities Sector. Given continued maturing of the U.S. economic cycle, we believe a modest shift from economically-sensitive to more defensive sector positioning is warranted. Further, given our economic outlook and the increase in interest rates over the past year, we see the potential for and likely impact of a continued rise in rates as diminished, which we believe reduces risks to the Utilities Sector. The addition of U.S. Utilities should increase potential downside protection in the event of continued market volatility. At the same time, while our fundamental thesis for owning Financials continues to play out, tailwinds for the sector from lower taxes and rising interest rates have subsided somewhat.
Reallocation within more economically-sensitive U.S. exposure: Next, within the portfolio’s more economically-sensitive U.S. sector exposures, we reduced the Consumer Discretionary Sector allocation and added to the allocations for the Communication Services and Information Technology Sectors. Consumer Discretionary has been the best-performing U.S. sector since the tax cut package was outlined in November 2017, but the likelihood of slower consumer spending growth reduces our conviction in the sector. In contrast, we see continued opportunity in Information Technology and Communication Services as the economic cycle matures, with enterprise spending on technology infrastructure to drive efficiencies and more spending on advertising to sustain consumer demand.
Reallocation within less economically-sensitive U.S. exposure: Finally, within the portfolio’s existing exposure to less economically-sensitive U.S. sectors, we reallocated a portion of the Health Care Sector exposure to the Consumer Staples Sector. The portfolio remains overweight to Health Care, and we continue to view the economic fundamentals of Health Care favorably. However, we believe a reduction in the Health Care overweight was warranted as political risk from a growing range of cost reduction proposals has spread across multiple industries in the sector. Meanwhile, the Consumer Staples Sector offers similar stability to Health Care, as Staples benefits from consumer strength without dependence on more discretionary spending, and Staples faces reduced interest risk in the current environment.