While markets have been fairly resilient at the start of the year, recent economic data have pointed to further weakening in the economy…

While the story last year was about inflation peaking, the 2023 narrative is shifting toward how quickly inflation can cool, and furthermore, how much cooling will be sufficient to get the Fed to pause its rate-hiking campaign.

The U.S. labor market was a shining star in 2022 against a dim economic backdrop of tighter financial conditions and recession fears. Although real GDP normally outpaces payroll employment, due to rising labor productivity, payrolls grew more rapidly than real GDP growth in 2022.

2022 was a difficult year for the public markets, as positive stock-bond correlations offered investors little to no protection against the macroeconomic backdrop of persistently high inflation, hawkish monetary policy and heightened geopolitical tensions.