From the Desk: Week of June 14, 2021

Weekly market insights from our investment teams

“The Fed finally struck a hawkish tone. Catching markets off guard, the Fed is now projecting two rate hikes in 2023. Expecting a quicker recovery, it upgraded its growth and employment forecasts for the next several years. For now, it didn’t adjust rates or scale back asset purchases.

The big turnaround is the pace and efficacy of vaccines. With the health risk under control the path to a full recovery is becoming more certain. The equity market reaction was measured while rates ticked up. It’s easy to get sidetracked by inflation scares, but the growth trajectory continues to improve. Meanwhile real yields – which are a proxy for growth improvements – helped push rates higher. This is just the first step in normalizing monetary policy from the dramatic moves needed during the pandemic. The pullback requires finesse, but this opening salvo sets the right tone.”

Dec Mullarkey

Investment Strategic Research & Initiatives

LinkedIn

Market insights are based on individual portfolio manager opinions and market observations. These are observations only and are not intended to provide specific financial, tax, investment, insurance, legal or accounting advice and should not be relied upon and does not  constitute a specific offer to buy and/or sell securities, insurance or investment services. Investors should consult with their professional advisors before acting upon any information posted here.