The Fed continues to tighten, but is it enough? … or too much?
Most investors we talk to think the US is already in a recession or that a recession will start by the end of 2022. We think they’re wrong on both counts… Don’t get us wrong; we’re not “recession deniers.” We think a recession is coming because monetary policy will have to get tight enough to bring inflation back down and a monetary policy tight enough to do that is also likely to drag the economy into a recession. We’re just not there yet. We expect a recession to start in the second half of 2023, with some risk of it starting in either the first half of 2023 or first half of 2024.– Brian Wesbury, Chief Economist, First Trust
The Fed’s tone has shifted recently with several FOMC members acknowledging that the pace of tightening will need to moderate in the coming months. This could cause the Fed to reduce the pace of tightening in December and then pause rate hikes early next year – Bob Doll, Crossmark Global Investments.
When will the pain end? To give an exact answer to [that] question would be the height of hubris, but at some point, the Fed will get ahead of inflation, probably sometime in 2023—and most likely amid a mild recession. – Vanguard
As always, we continue to believe that one’s circumstances and risk profile should determine the appropriate mix of investments, and not media headlines. Please contact us if you ever have any questions or concerns about your accounts or any news you hear.
Information in this commentary is gleaned from third party sources, and while believed to be reliable, is not independently verified. This content is not intended to be tax, legal, investment or fiduciary advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Bernardo Wealth Planning recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. Past performance does not guarantee future results.