Please find the next blog in our monthly series that provides a snapshot of the markets and the state of the economy.
- Risk assets declined in September as investors reacted to weaker economic data, the debt ceiling fight, and shifting policy support
- Fed messaging tilted more hawkish, with tapering likely later this year and increased support for a 2022 rate liftoff
- Inflation moderated but is expected to remain elevated into 2022 amid ongoing supply disruptions and labor shortages
- Global Equities (ex. EM) still outperforming bonds year-to-date
- Fixed income returns negative as rates rise in September
Asset Class Valuation
- Equities still favored over bonds
- Non-US equities favored over US equities
- Equities, H.Y. bonds, R.E. provide an inflation hedge
Key Risks We Are Watching
- Coronavirus Delta Variant
- Fiscal Stimulus
- Consumer Behavior – Savings/Spending
- Financial Conditions; Fed Tapering
- Regulatory Policy Shifts (US and China in particular)
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