The Federal Reserve remains committed to bringing down inflation. With strong job numbers and inflation that remains above the long-term target of 2%, it is increasingly likely the Federal Reserve will raise interest rates a few more times in 2023. A shallow recession also remains a possibility.
Cash & Fixed Income: High-yield corporate bonds led for all time periods. Aggregate bonds were the laggard for the past 1, 3, and 5 years while cash was the worst performer for the past 10 and 15 years.
Equities: Large U.S. stocks led for all time periods. Real estate was the worst performer for the quarter, 1 and 3 years, Small-cap stocks were the worst performer for the last 5 years, and foreign was the laggard for the past 10 and 15 years.
The market is looking past the economic slowdown even before it has occurred, which we feel is not wise. As a result, we will maintain our defensive positioning until the economic road offers more stable footing.
As a reminder, the index returns below should only be used as a very broad point of reference.
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