St. Aubin on Morningstar Markets Brief: “Tectonic shifts in forecasting Fed policy” (Article 3/31/2023)
Even as the Fed looks to pause rate hikes, reasons for caution abound.
Tech stocks benefited as investors flooded into the beaten-up group, expecting it to benefit from a Fed pause and move to cut interest rates. Also, mega-cap techs are seen as having fortress-like balance sheets able to withstand a serious downturn.
But the first quarter was anything but an easy ride.
“It was a quarter that saw tectonic shifts in forecasting Fed policy,” says James St. Aubin, chief investment officer at Sierra Investment Management in Santa Monica, California, calling the first-quarter action a “roller-coaster ride” in which investor expectations around inflation and how the Fed would respond to it changed multiple times from start to finish.
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The thoughts and opinions expressed in the article are solely those of the person speaking as of 3/31/2023. The discussion of individual companies should not be considered a recommendation of such companies by the Fund’s investment adviser. The viewer must make his/her own assessment of the relevance, accuracy, and adequacy of the information contained in this article, and make such independent investigations as he/she may consider necessary or appropriate for the purpose of such assessment.