Global markets started the year in a risk-off mood with high inflation proving persistent and the Fed’s hawkish pivot intensifying. Russia’s invasion of Ukraine made a difficult situation even worse for global central banks by adding a stagflationary shock to the mix. Equity markets corrected during the quarter, with some declines meeting the technical definition of a bear market. Moves in bond markets were also substantial, with yields repricing given the significant change in Fed policy expectations. While it has been a rough start to the year for stocks and bonds, real assets such as commodities and gold shined, helping to hedge rising geopolitical and inflation risks.
