A new economic cycle and bull market began about a year ago on the heels of a short-lived Covid recession. Buoyed by massive policy stimulus, economic growth has been strong, earnings growth has been stellar and stock market returns have been nothing short of spectacular.
As we approach an inflection point on fiscal and monetary policy, investors are now starting to focus on an anticipated deceleration of growth. Beyond this shift in stimulus, there are other concerns swirling in the market as well.
The proposed infrastructure package comes bundled with higher taxes that are generally restrictive for growth. The perennial debate over the debt ceiling is now front and center. Supply chain constraints may keep inflation high and raise the specter of stagflation. And the Delta variant of the coronavirus continues to circulate and slow down the pace of reopening.
We look at the topics of monetary tapering and tightening, fiscal cliff, higher taxes, debt ceiling and transitory inflation to answer one key question. Are these potential headwinds likely to become major disruptors of growth in the coming months? Or will they merely be distractions on a bumpy road to recovery? Join Sandip Bhagat, Whittier Trust’s Chief Investment Officer, as he discusses our perspectives and outlook.
Whittier Trust Company and The Whittier Trust Company of Nevada, Inc. are state-chartered trust companies, which are wholly owned by Whittier Holdings, Inc., a closely held holding company. All of said companies are referred to herein, individually and collectively, as “Whittier”. The accompanying materials are provided for informational purposes only and are not intended, and should not be construed, as investment, tax or legal advice. Please consult your own investment, legal and/or tax advisors in connection with financial decisions and before engaging in any financial transactions. These materials do not purport to be a complete statement of approaches, which may vary due to individual factors and circumstances. Although the information provided is carefully reviewed, Whittier makes no representations or warranties regarding the information provided and cannot be held responsible for any direct or incidental loss or damage resulting from applying any of the information provided. Past performance is no guarantee of future results and no investment or financial planning strategy can guarantee profit or protection against losses. These materials may not be reproduced or distributed without Whittier’s prior written consent.