Please find the next blog in our monthly series that provides a snapshot of the markets and the state of the economy.
- Concerns over Central Bank tightening, inflation, and geopolitical tensions caused most asset classes to decline for the month
- The Federal Reserve set expectations for a March rate-liftoff while the ECB is not likely to raise rates until 2024
- US GDP growth exceeded expectations in 4Q with a 6.9% annualized rate, but the US growth advantage vs. rest of world is expected to fade during 2022
- Most asset classes began 2022 with negative returns
- Last year’s winners dropped the most; EM outperformed
Asset Class Valuations
- Equity valuations still attractive over bonds
- Equities, H.Y. bonds, R.E. provide an inflation hedge
Key Risk Factors We Are Watch
- Coronavirus Omicron Variant
- Inflation / pace of consumer spending
- Financial Conditions; Fed Tapering
- Geopolitical tensions
- Regulatory Policy Shifts (US and China in particular)
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