Rising inflation, the war in Ukraine, a possible US default, and the Federal Reserve’s rate hikes were all contributing to a volatile market, and Fred Hubler laid out how each piece fit together. He noted that US inflation, measured by the Consumer Price Index, rose 7.9% in February 2022, the highest rate in 40 years, driven by supply chain disruptions, increased demand, and the war in Ukraine, while sanctions against Russia disrupted trade and pushed energy prices higher.
Hubler also pointed to the Fed, which had raised interest rates four times since March 2022 and was expected to keep going, slowing economic growth in the process, and to the risk of a US debt default, which he warned could shake investor confidence, hit stock prices, weaken the dollar, and undermine the currency’s safe-haven status globally. Against that backdrop, he argued for diversifying into alternative investments like real estate, private equity, and hedge funds alongside traditional stocks and bonds.
The waters were choppy in 2023 for good reason – four intersecting economic pressures, one strategy for weathering them.
Hubler details how each of these alternatives fits into a diversified strategy on Forbes, Navigating Choppy Seas -How To Stay Afloat In A Sea Of Economic Turbulence.