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Interest Rates, Inflation, Supply Chain Issues, and the Russia-Ukraine Situation...

Our volatility indicators are still negative and the trend is still down. For our noninstitutional clients we are sitting on a very healthy amount of cash and 1–3-month T-Bills. The market is experiencing a selloff with the news of Russia accusing Ukraine of shelling Russian rebels in Ukrainian territories. There are still a lot of uncertainties facing the market this year, with inflation at a 40-year high and increasing interest rates. This goes without saying but expect more volatility during the first half of this year.

The bond market is clearly in a downtrend, and it looks like this is just the beginning of the pain for bond holders.

From a chart pattern, in the short-term, it looks like the market is setting higher highs and higher lows, and this is a positive for the market.

Wait times for truck drivers are starting to get shorter in Houston, Savannah, Miami, and Newark. On the other side, California is not. This is most likely due to excessive restrictions.

If this data is correct, it could signal that the tightening supply chain is easing up. COVID protocols are contributing to tightness, so as COVID eases, inflationary pressures will cool.

At least this is the hope, we'll see how this works itself out.

And remember – the one fact pertaining to all conditions is that they will change.

Best regards,

Kurt S. Altrichter, CRPS®

Fiduciary Advisor | President

Direct: 952.828.5336

—Written 02.18.2022.


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