Our Thinking

The pandemic brought a jumble to all facets of life. Financial markets reacted as expected, first pulling back with higher risk and then recovering on the backs of policy initiatives around the world. A review of some key relationships can provide perspective for economic activity and investing ahead.

A review of sovereign debt levels, credit trends and relative ratings can provide perspective for economic activity and investing ahead.

During a financial inversion, interest rates are lower for longer maturities, and financial visibility is poorer due to the relative higher cost of short-term borrowing. A review of prior periods can bring perspective for economic activity and investing as an inversion is underway.

Investors spend much time on anticipated events, the potential outcomes, and implications for portfolio strategy. A review of some recent events can provide perspective for moving onward to economic activity and investing ahead.

In its attempt to lower inflation, the Federal Reserve has raised its policy interest rate target to the highest level in 17 years.

Banking is a core activity in the economy and in financial markets, receiving deposits, making loans and investing. A review of trends in banking can provide perspective for economic activity and investing ahead.

Shelter is an essential part of well-being, and owner-occupied residential housing provides shelter for many. A review of trends in housing can provide perspective for economic activity and investing ahead.

Expectations for future market outcomes often are a blend of historical experience and more recent developments. A review of changing expectations for all assets can provide perspective for achieving investor goals ahead.

2022 was a challenging year for most markets, especially stock and bond markets. A review of diversification outcomes over time can provide perspective for investing in markets ahead.

In the current efforts to lower inflation, policymakers have shied from including “recession” in their commentaries and prognostications. Instead, more frequently, the phrase “demand destruction” has been used.