Fynsa
Although the Fed is nearing the end of its rate-hiking cycle, the federal funds rate is still likely to rise further, given the strength of the labor market, though at a moderate pace.
While equities have a relative advantage over bonds in a more inflationary environment, as inflationary pressures begin to moderate, an intermediate step in risk taking should be via investment grade fixed income.
You may say I am a dreamer: economic policies work and eventually we will return to equilibrium. It's not free, though, like nothing else in life.
The market is beginning to doubt that central banks globally will remain aggressive in the fight against inflation as risks to financial stability increase.
While the Central Bank is doing everything possible to lower inflation, the work of the public and private sectors must focus on productivity, the only way to generate wealth without boycotting the work of monetary policy.
If anyone still had any doubts that the U.S. Federal Reserve is focused above all on meeting its inflation target, those doubts were dispelled this week.
This logic is rooted in the market playbook from past recessions, but "the world is different now; inflation is much higher."
