Q1 2022 Market Review

Volatility set in in the first quarter of 2022. Stock markets were down across the board and bonds had one of their worst quarters ever as interest rates shot up (bond prices and rates move in opposite directions). The US and international stock markets were down around 5%, and emerging markets were down almost 7%. Bonds in the US fell nearly 6% while global bonds were down around 4%. The latest inflation numbers show that inflation rose to 8.5%, the highest rate since 1981.

 For a detailed Market Overview, click here.

 Inflation Opportunity: In December I wrote about government issued I Savings Bonds, which have an inflation component as part of the interest rate they pay. Rates are reassessed in May and November and apply for six months. With March CPI numbers released, the new rates for May can be calculated, providing a look at what rates will be for a full year if purchased this month. The current rate is 7.12% for bonds purchased in April, and the May rate looks to be 9.62%, providing a combined rate of 8.54% for a full year. If you wait until May to purchase, you will get 9.62% for the first six months but don’t know what the rate will be for the following six months. There are limitations and other things to know before purchasing, you can learn more from my December article here or at the Treasury Direct website.