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What Does the Rest of 2023 Hold?

Colleen Gillespie, AIF®, CTFA



Happy Summer! This is a perfect time of year for us Washingtonians to get out and enjoy the gorgeous weather outdoors after the winter and cooler spring months. We hope you’ll get to do everything on your wish list this summer, and maybe check out our mid-year financial checklist!

 On our wish list for the markets is to get some clarity on the “will there be or won’t there be” question of a recession: There’s no agreement among analysts and economists, with some saying no, we’ll get a “soft landing” after the aggressive interest rate hikes the past 15 months; while others give us a 25% chance; and still others are certain the shoe will drop any time. At last week’s Federal Reserve meeting, Chairman Powell shared that while they paused raising rates this month, they’re looking at two more increases this year. Will that be enough to slow inflation further? How resilient is our economy right now? Even as I write this article, it was announced that the first quarter of 2023 saw an increase of 2% (annualized pace) in Gross Domestic Product (GDP), a revision from the 1.3% reported. With consumer spending comprising 70% of GDP, when will we stop spending and hiring?

 Our friends at J.P. Morgan Asset Management shared some ideas with us recently from their Market Insights white paper, entitled “Slow Motion Slowdown,” on their view from the front window.

The above information is pretty consistent with what other economists and money managers are saying, and when we completed the semi-annual rebalance of portfolios the past two weeks, we did reallocate some of the slices of our portfolio pie to take advantage of better bond yields, opportunities in global economies outside of the U.S., and a little pinch of growth stocks added back into the mix. In the meantime, it’s still a “wait and see” scenario in the battle between lowering inflation and recessionary pressures. As always, please let us know if you have any questions or concerns. Don’t forget sunscreen! 🕶️☀️