For central bankers, the world is now a fairly complicated puzzle. In China, the economic recovery appears to be slowing due to weaker-than-expected (desired?) consumer demand and problematic unemployment, challenging policy-makers to provide “appropriate” economic stimulus. In Europe, restrictive credit seems to be having some of the desired effects of slowing economic activity and possibly reducing inflationary pressures, but food inflation remains uncomfortably high. And in the United States, Federal Reserve Chairman Powell’s hopes to be able to hit the pause button in June on raising interest rates may be well on their way to being dashed as inflation appears to have also hit a “pause” on its much-hoped-for deceleration below 4%. Across U.S. style & market cap indices, large-cap growth did the best, and the quality factor led more broadly. Once the debt ceiling negotiations are settled, investors can revisit focusing on recession risks, margin compression and possibly more Fed tightening. Details of a debt ceiling agreement are still to come on certain parts of the deal, but several key points: cap government spending over the next 2 years, claw back certain unused COVID funds, reduce IRS funding, restart student loan payments, limit the ability to raise taxes, and certain energy permitting reform. On the wealth planning front, we talk about taking a break from work, maybe unintentionally. Today’s labor market is competitive overall, but certain sectors, such as Technology, have experienced a slump in the past year.
Click Here to Read the May 30, 2023, Economic Commentary
Click Here to Read the May 30, 2023, Investment Commentary
Click Here to Read the May 30, 2023, Wealth Planning Commentary
