In April, the Consumer Price Index (CPI) slowed to 8.2% year-over-year, coming down from 8.5% in March. Even though the majority of price increase are coming from energy and food, considered the more volatile parts of inflation, the Federal Reserve (Fed) acknowledged a need to regain control of prices.
Capital market volatility increased notably in the quarter and asset class returns were almost uniformly negative as the Russia/Ukraine conflict, the Fed’s rate hike campaign, elevated inflation and rising interest rates weighed on investor sentiment.
While February began with eyes on Fed Chairman Powell’s hawkish stance, inflation and a focus on the job market, the resounding theme was Russia’s invasion of Ukraine during the last week of the month. As this evolved from a low likelihood event to a distressing reality, markets adopted a risk-off stance.
2022 started with a thud and plenty of market moving headlines. Omicron, inflation and the Federal Reserve, among other topics, weighed on the minds of investors.
Over the past two-years, global central banks took many measures to fight the economic implications of an economic shutdown. Those policies, along with supply chain disruptions, have cause inflation globally to tick up at an increasing pace.
Global equity markets took a step back in November, with investors favoring safe-haven assets. Emergence of the new Omicron COVID variant and more hawkish comments by the Federal Reserve led to market volatility late in the month. U.S. political gridlock eased with passage of the $1 trillion infrastructure bill and with the House advancing the “Build Back Better Act” (BBBA).
U.S. Capital Wealth Advisors Form CRS