05/19/2022
Interesting commentary from our market strategists...
Key takeaways from this piece -
- Inflation moderated a bit to 8.3%, down from 8.5% but still a bit above the projected 8.1%,
- Year end projections are around 6.1% overall (based on trends in the CPI and PPI). Typically, it takes about 2 years for this trend to bottom out.
- In order to consider it a downward trend, we will need to see 3-4 consecutive negative reports.
- If we do, this will likely slow down the Fed and their interest rate hikes, which they have always said they will use to combat inflation.
- The bond markets have seen yields jump quite a bit (as would be expected).
- The 10 YR Treasury is up from 1.5% to 3.0% and the 2 YR Treasury (which aligns with Fed policy for the next two years) is trending upward as well.
Overall outlook is that yields will slow down and bonds will start to act like bonds (i.e. not stocks!) and provide the diversification you need in a well balanced portfolio.
These are early signs to pay attention to and not absolute, but good to see!
Bottom line is the sky is not falling. Volatility is opportunity! Use this market environment to take advantage of what the markets are giving you.
Talk to us about how to understand what your options are and what makes the most sense, but don't let fear guide your decisions!
“The four most expensive words in the English language are, ‘This time it’s different.” -Sir John Templeton
