Viewing entries tagged
inflation
The probability of recession arising, and inflation re-accelerating have both being revised up, discussed in full within our economic update. This quarter we also take a walk down memory lane, looking at similarities to 1948 and offer up some killer dinner party conversation fodder... the 'kinked Phillips curve' framework, in our deep dive into labour markets.
It seems we are nearing the end of the interest rate tightening cycle, with the RBA keeping things on hold, the Fed having slowed its rate of tightening, and the RBNZ expected to have put through their final super-sized rate hike.
Widespread weakness can be seen in the US banking sector. A deposit rate paradox has emerged, where raising deposit rates leads to a reduction in net interest margins, causing banks to operate at a loss. While leaving deposit rates near zero increases the likelihood that depositors withdraw their capital.
The rapidly changed interest rate environment now rewards a more traditional mix of bonds and equities, which deliver diversified return characteristics for the first time in some years.
Seemingly temporary #inflation pressures have morphed into structural inflation, driven by a shortage of housing and workers. This has resulted in higher #interestrate expectations and being hugely disruptive to #markets.
#CentralBanks are slamming on the brakes. Where the Fed goes, the world follows, sometimes unwillingly. The sharp change in central bank policy settings has been a catalyst for a decline across all #assetclasses.
Could 2022 be the year market psychology transitions from flawless to hopeless? Find out in the #SnowgumQuarterly.
2021 was another harrowing year. Many businesses continue operating on life support. As we commence 2022, the Omicron variant reminds us that a return to normality is impossible to predict.
Meanwhile, markets remain near all-time highs, although cracks are emerging. The growing and ignored elephant in the room remains government debt. We explore how this might be resolved, and what impact this may have on investors.
