Key Takeaways
Sailing on Strange Seas! Traditional indicators have been flashing warning signals for some time now, but the economy continues to defy expectations. Nearly 18 months into the tightening cycle, growth has remained surprisingly resilient—supported by record low unemployment and a consumer that keeps on spending. The unusual nature of this economic cycle and pandemic-induced policy interventions have made it challenging for policymakers to calibrate the right amount of restraint needed to bring inflation back down to target. While considerable progress has been made, the last mile is fraught with uncertainties. It’s no wonder Federal Reserve (Fed) Chairman Jerome Powell mentioned that the Fed was “navigating by stars under cloudy skies.” But as we prepare to set sail into the final quarter of the year, we believe the strong macro backdrop over the last few months is likely to become more challenged. Here’s what it means for the economy and the financial markets.
All expressions of opinion reflect the judgment of the author(s) and the Investment Strategy Committee, and are subject to change. This information should not be construed as a recommendation. The foregoing content is subject to change at any time without notice. Content provided herein is for informational purposes only. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices and peer groups are not available for direct investment. Any investor who attempts to mimic the performance of an index or peer group would incur fees and expenses that would reduce returns. No investment strategy can guarantee success. Economic and market conditions are subject to change. Investing involves risks including the possible loss of capital.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Diversification and asset allocation do not ensure a profit or protect against a loss.