Please find the next blog in our monthly series that provides a snapshot of the markets and the state of the economy.
- Continued concerns over the war in Ukraine, inflation, and tightening monetary policy drove volatility higher in March across asset classes
- With Inflation rising to a four-decade high, the US Federal Reserve raised rates by 25 bps and signaled more aggressive tightening going forward
- US Treasury yields surged, particularly on the front-end, leading to a flattening and partially inverted yield curve
- Most equities rebounded in March, EM and bonds lagged
- 1st quarter returns remained negative across asset classes
Asset Class Valuations
- Equity valuations still attractive over bonds
- Equities, H.Y. bonds, R.E. provide an inflation hedge
Fed Tightening Sends Rates Higher, Curve Inverts
Key Factors We are Watching
- Geopolitical tensions
- Inflation / pace of consumer spending
- Financial conditions; Fed tapering
- Coronavirus variants
- Regulatory policy shifts (US and China in particular)
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