MARKET UPDATE | FOURTH QUARTER 2022
Persistent inflation forced the Federal Reserve’s (Fed) hand in raising interest rates to 4.5%, resulting in a repricing of all financial assets. The Fed’s sudden end to an era of easy money shook financial markets in 2022. Both U.S. and international equities entered bear market territory, with international stocks slightly outperforming those in the U.S. Bonds recorded their worst year ever in 2022, due primarily to the rapid rise in yields. The long-term outlook for stocks and bonds has improved due to more favorable valuations for stocks and higher expected yields for bonds.
