• Home
  • About
    • Our Team
    • What is a certified financial planner?
    • About our flexible fee system
    • What We Do
  • Services
    • Wealth Management & Financial Planning
    • Investment Planning
    • Spirit Fiduciary Partners
    • Retirement & Estate Planning for Texas A&M University employees
  • Current Clients
  • Internship Opportunities
  • Blog
  • Newsletters
  • Contact
TRADITIONS WEALTH ADVISORS
  • Home
  • About
    • Our Team
    • What is a certified financial planner?
    • About our flexible fee system
    • What We Do
  • Services
    • Wealth Management & Financial Planning
    • Investment Planning
    • Spirit Fiduciary Partners
    • Retirement & Estate Planning for Texas A&M University employees
  • Current Clients
  • Internship Opportunities
  • Blog
  • Newsletters
  • Contact

Market Outlook - April 2022

4/28/2022

0 Comments

 
Traditions Wealth Advisors
Noah Skrudland
Financial Analyst Intern
4/28/2022


I. Summary:
First Quarter 2022
Two major events overshadowed the first quarter of 2022: the sudden hawkish (high-interest rates) stance the Federal Reserve has announced and the Russia-Ukraine war that has contributed to persistent inflation.

On a positive note, the unemployment rate is at 3.6%, which is historically low. Jerome Powell stated that there are 1.7 available jobs for every person looking for employment. Meanwhile, corporate earnings have been strong throughout 2021. Earnings increased over 48% for the calendar year 2021.

Inflation:
Most recent inflation numbers show the all-items CPI up to 8.5%. Gasoline prices have increased 48% since this time last year. Inflation is still being carried by supply chain bottlenecks, high stimulus-induced consumer demand for goods, high shelter prices, wage growth, and rising energy prices.
  • According to S&P Schiller Data, over the past year, housing prices have increased by over 20%.
  • Labor shortage has increased the risk of inflation. The average hourly wage increased by 5.6% year over year.​ ​
Picture
Rise in Interest Rates:
In the bond market, bond yields have seen a steep rise causing a historical bond market selloff. The 10-year Treasury went from a yield of 1.52% on December 31, 2021, to 2.81% on April 25, 2022, an increase of 85%. The Federal Reserve uses rate hikes as a tool to combat inflationary issues. While lowering rates tends to promote economic activity, then raising rates is often a restraint. This is the Fed’s most often used and widely known tool to fight inflation.

Their secondary tool is to decrease the level of assets held by the Federal Reserve, also known as their balance sheet. During COVID-19, the Federal Reserve began Quantitative Easing (QE) efforts. QE usually consists of buying a large number of mortgage-backed securities, Treasury notes, and bonds. This was a strategy to add liquidity to the markets so banks could borrow and lend more freely. Now that inflation is here to stay, they plan to decrease the balance sheet by just under $100 billion per month in the near future. By doing this, other investors will have to purchase the government’s assets which will lead to higher rates.

It is important to keep a close eye on the Federal Reserve to understand its strategy for raising rates. On May 3-4, The Federal Open Market Committee will have a meeting to increase the federal-fund target range. Some experts are expecting a half-point (.50%) increase, but it will be interesting to see how the Fed handles this predicament.

Questions? Contact Brien at 979-694-9100 or
​ Brien@TraditionsWealthAdvisors.com


Source: EO-Booklet-2022-1Q.pdf (jamesinvestment.com)
0 Comments



Leave a Reply.

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    October 2018
    August 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    August 2017
    January 2016
    December 2015
    September 2014
    June 2014

    Categories

    All
    Fee Only
    Financial Advisors
    Personal Information Security

Let our team work for you. Call 979-694-9100 or
email michael@traditionswealthadvisors.com.


Picture
TRADITIONS WEALTH ADVISORS
2700 Earl Rudder Frwy South, Ste. 2600
College Station, TX 77845
OUR SERVICES
- Wealth Management & Financial Planning
- Investment Planning
- Spirit Fiduciary Partners
- Retirement & Estate Planning for Texas A&M University employees

VISIT OUR BLOG:  Stay current with industry news and tips.
Picture
Picture


ADV  |  Privacy Policy
© COPYRIGHT 2015. ALL RIGHTS RESERVED.
  • Home
  • About
    • Our Team
    • What is a certified financial planner?
    • About our flexible fee system
    • What We Do
  • Services
    • Wealth Management & Financial Planning
    • Investment Planning
    • Spirit Fiduciary Partners
    • Retirement & Estate Planning for Texas A&M University employees
  • Current Clients
  • Internship Opportunities
  • Blog
  • Newsletters
  • Contact