2022 has started with even more uncertainty than 2021 when it comes to recovery post-COVID. The leading drivers of this have been inflation, rate hike plans, and unexpected spikes in COVID-19 cases due to the Omicron variant. So as we gear up for March, investors are preparing for the Federal Reserve to begin raising interest rates.
Why Rates Are Increasing
Inflation continues to climb into what has been the highest annual rate in almost 40 years this month. All of this leads to higher borrowing costs and decreased profit margins, which can be discouraging to investors. Some other factors affecting the economic environment are the geopolitical tensions between the U.S. and Russia. Exemplified through the increased gold and bond yield prices.
Omicrons Involvement In The
The record Omicron COVID-19 numbers set us back dramatically as millions of Americans were forced to stop working to take care of loved ones, lowered consumer activity, and increased the already prominent staffing issues across all industries. This variant slowed down the economic recovery anticipated for the beginning of the year, pushing jobless claims up and giving wage and inflation a boost.
What You Can Expect
As we tackle the next couple months, here’s what you can expect from the Fed:
- A shift in policy; including a rate hike in March & June
- A balance sheet runoff likely to start in June or July
The Federal Reserve is looking to identify their plan for the next 6 months and lay out what will happen as we finish out the year.
If you still have investment goals for the year, there are options to help you despite the overall climate and uncertainty. Over the last couple of years, the Wisconsin market has continued to stay stable and consistent – making it one of the most sought after areas to live and invest in. Let one of our experts at WiscoTurnkey develop a customized plan that helps you meet your goals, schedule a call with us today.
