Americans are feeling the effects of soaring inflation not seen in forty years. Inflation, as measured by the Consumer Price Index, has surged this year, hitting a high of 9.1% in June and posting an elevated reading of 8.2% for September.1 As a counter offensive, the Federal Reserve has been aggressively raising rates to cool demand to fight inflation. Both stocks and bonds have seen tremendous declines this year, impacting the portfolios of millions of Americans.
Here is a backdrop of 2022 and how you can position your portfolio for success in the years ahead.
The S&P 500 has shed over $10.2 trillion since the start of the year through September 30th; or roughly 25%. The aggregate bond index is down over 15% during the same time period. The Federal Reserve has raised rates five times this year, starting the year at 0%-0.25% and ending at a target range of 3%-3.25% as of the September meeting. The Fed is set to meet two more times this year to determine interest rate policy.2
You can read the full article by Senior Portfolio Manager, Director of ESG Strategies Andy Drennen in the Springfield Business Journal.
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The views and opinions expressed in this article are those of Andy Drennen and are not endorsed by, and do not necessarily reflect the views of, Simmons Bank. Simmons Bank does not provide tax, accounting, or legal advice.
Works Cited
1Trading Economics. (2022, October 17). United States Inflation Rate. Retrieved from https://tradingeconomics.com/united-states/inflation-cpi
2Board of Govenors of the Federal Reserve System. (2022, October 17). Open Market Operations. Retrieved from FederalReserve.gov: https://www.federalreserve.gov/monetarypolicy/openmarket.htm