We first want to wish all our readers and clients a Happy New Year!
As we say goodbye to a tumultous 2021, we look forward and to 2022 and what it may have in store for investors. 2021 saw inflation run away to heights not seen for decades. The Fed completely under-estimated this and shifted gears stating it was going to get serious about tackling inflation by tapering its bond buying and raising interest rates in 2022. The markets are re-calibrating. How big an issue is "inflation" and how soon can it be brought under control? These are the key questions as they will influence how aggressive the Fed is with respect to raising interest rates.
The key determining factors with respect to taming inflation are:
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