The headlines dominating stock and bond markets are related to inflation and the Federal Reserve Bank’s series of aggressive interest rate hikes designed to cool the economy and slow inflation. As rates rise, both stocks and bonds tend to move toward lower prices. In addition to slowing economic growth, rising rates also tend to lead to tighter lending conditions at banks and the potential for recession and debt defaults. If rates are higher for longer and both stock prices and bond prices remain under pressure, investors are understandably seeking for investment alternatives to improve both returns and diversification.
WEBCAST – Macro update: Soft landing vs. hard truths
While the economy continues to surprise to the upside, the impacts of lingering inflation, policy uncertainty, geopolitical turmoil, and shadow tightening pose mounting headwinds. With equity valuations still elevated and the correlation between stocks and bonds at historic levels, investors will likely need to look outside of traditional markets to meet investment goals.
Join FS Investments’ Chief U.S. Economist Lara Rhame and Director, Investment Research Andrew Korz as they discuss the economy, the path forward for rates, and alternative ways to navigate markets in the coming year.
Accepted for 1 CFP® / IWI / CFA CE Credit