We are encouraged by positive COVID-19 data domestically and abroad. The Fed will likely begin to slowly pull back on some of their accommodative policy later this year, but this will not create overly tight conditions. This move should help slow down the rate of inflation, but supply chain congestion and rising wages will continue to drive inflation in the near term. We continue to focus on diversifying our equity exposure and positioning our fixed income investments for a period of rising rates. The key points for October’s update are:
- Average daily COVID-19 cases are 41% lower than the start of the summer and lagging indicators like hospitalizations and deaths are also starting to decline.
- Concerns over the federal government running out of money caused some volatility in equity and fixed income markets, but congress did pass a resolution to raise the debt ceiling into December.
- The US is the only developed economy that has regained pre-pandemic levels of GDP growth.
We hope you find this video educational and informative. If you have any questions, please reach out to your advisor. As always, thank you for putting your trust in the Merit team.