The Investor Insight - October 2023

When everyone seems to expect a soft economic landing after the unprecedented rate hike cycle in which the Fed has engaged for the past 14 months, brace for impact. That is the lesson of recent economic history, and it’s an uncomfortable one for the U.S. right now. There are a multitude of reasons to think that the unwinding of 14 years of easy money—with the Fed pegging rates at zero and four episodes of quantitative easing, the last one right when COVID hit—would not be an easy process. And it is proving to be just that, an extremely difficult undertaking with no historical precedent. The Fed itself admitted such at its last meeting. The reasons are many and varied: the cessation of COVID-era stimulus payments to consumers, the reinstatement this month of student loan payments, government shutdown worries, war, supply chain disruptions, higher oil prices, tighter credit standards from stressed banks, the highest consumer debt on record, and mortgage rates approaching 8% (from 3% early last year). The list seems to keep growing.

What’s Inside?
- Q3 Commentary - Too High, Too Fast, Too Long
- Navigating the High-Interest Rate Environment: Impacts and Strategies