2022* Investment * outlook *
The(recent explosion in( inflation has( caused The ( ( ( ( US Federal ( Reserve ( Bank, ( (the Fed, ( had investment markets been saying for ( ( ( ( to turn (from where( they ( ( ( ( most( of ( 2021 that ( it were, in a growth mindset, to one where expected inflation to come under (( ( ( ( ( ( ( ( ( ( control ( th value (shares are( beginning to outperform. quickly. The inflation data on 10 ( ( ( ( ( ( ( ( ( ( (February We have ( written ( ( extensively ( (on this ( 2022 showed 7.5% annualised inflation, the development over the past few years, highest inflation rate since 1982. This has ( ( that when ( markets( turn (it will( be ( since ( risen ( to 8.3% ( in( May. ( ( ( ( warning ( cyclical ( ( (( ( ( ( ( decisively( in favour( of( cheaper, ( from inflation. ( ( ( ( ( ( ( ( shares that( benefit
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Source: US Bureau of Labor Statistics
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( This different outcome has caused concern ( Fed and( a change (in tack ( towards ( a at the ( ( of ( (increase (in ( interest( rates.(( faster rate ( ( expectations ( (are now ( of (between ( 4( Market ( ( ( ( ( and 5 increases (of 0.5% each time) in U.S.(
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interest rates in 2022, which is a rapid rate ( tightening ( ( ( given ( (where interest ( ( rates ( have of ( the past few ( decades, ( ( but ( nowhere( been over ( ( ( (they were ( ( ( ( the near as high as during ( ( ( ( ( ( ( 1980s. inflationary periods in the 1970s and
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