NEIRG invites you to review our quarterly market environment report. This report is updated through Q4 2022. Global markets moved higher for most of the quarter as signs emerged that inflation may have peaked. However, some of the quarter’s gains were given back in December as fears of an economic slowdown and further Federal Reserve tightening weakened sentiment.
The drawdown in stocks and bonds last year appears to be a reasonable response to the Fed’s tightening cycle and the resulting uncertainty for economic growth. The decline in equities can be explained by the rise in interest rates putting downward pressure on valuations. The outlook for inflation and its impact on Fed policy likely will remain the key driver of markets’ direction in 2023.