Market Perspectives: March 2022

  • Following the economic effects of the Omicron variant, we have downgraded our full-year 2022 U.S. growth from around 4.0% to around 3.5%.
  • More important than the number of hikes in 2022 is the Fed’s eventual terminal rate, which Vanguard believes will need to be around 3%.
  • In our base case, Vanguard foresees inflation peaking in the first half of 2022, though we expect core inflation to persist above 3% through 2022.

Ukraine and the changing market environment

With geopolitical tensions such as the conflict between Russia and Ukraine, investors often ask whether a link exists between current events and financial market performance. However, when we examined major geopolitical events over the past 60 years, we found that while equity markets often reacted negatively to the initial news, geopolitical sell-offs were typically short-lived.

Active Fixed Income Perspectives: Q1 2022

The latest issue of Vanguard Active Fixed Income Perspectives provides a sector-by-sector breakdown of activity in the U.S. and global fixed income markets, as well as the implications going forward for Vanguard’s active fixed income lineup.  In this issue, we assess where interest rates are going in 2022 and explain why we believe fortune favors the disciplined.