FAS Market Update May 2024
In conclusion we feel the fear of a stagflationary US economy like the 1970s is overwrought. There are many risks we consider when allocating client capital across a diversified portfolio. While we certainly do not want to be mischaracterized as pollyannish when considering the economic landscape as we continue to monitor risks, there are many factors which contribute to a stagflation outcome being a lower probability event in our view. In particular, a Fed committee who has seemingly learned the past lessons of easing monetary policy too quickly after an inflationary episode. Although higher than recent interest rates are painful for many, from a portfolio allocation perspective we see benefits for many clients as a result of investing in high quality sources of income to supplement current and future standards of living. One thing we know for certain, financial markets are ever changing and our goal is to pursue relative opportunities on behalf of our clients’ investment goals.
