We’re not there yet! Federal Reserve Chairman Jerome Powell was relatively hawkish at his last press conference, as Fed members predicted another hike this year, and raised their forecasts for rates next year. More importantly, rates on long bonds moved up as the market faces an onslaught of Treasury issuances and a shortage of buyers. These latest developments hurt bonds, stocks, and gold, all closing down into the quarter end. Looking ahead, however, we see an economy accelerating on the downside, and inflation set to move back up as the impact of higher oil prices works its way through all goods in the stores. That combination is the dreaded stagflation, typically a positive environment for gold if not always for equities. As the economy slows and the government’s debt service burden moves up, all ahead of a presidential election, the Fed will likely opt for caution.

Finish reading here: Portfolio Review 3Q2023