Break-even math: How much gain is needed to recover from a loss fully?
Investors may undervalue the impact of investment losses and don’t know that more significant gains are needed to recover fully.
February Monthly Dashboard: Growth and rapid inflation should prompt more restrictive Fed policy
February 25, 2022
By Nationwide Economics
Share
Monthly Review (Page 2)
The impacts from the Omicron variant were less severe than expected with a strong pace of hiring and a surge in retail sales for January. Still, supply chain disruptions remain widespread and may have been exacerbated temporarily by the spike in Covid cases, resulting in slower growth of business activity and even higher inflation. With price gains at the fastest pace in 40 years, consumer sentiment plunged to a pandemic low while the Fed has signaled imminent rate tightening, with financial markets expecting significant moves, contributing to recent market volatility.
Outlook (Page 3)
The sustained surge in inflation is forcing a policy change by the Fed, with analysts now expecting the Fed to tighten by at least 100 bps in 2022 — and some looking for 175 bps. While inflation is expected to peak soon, annual readings should remain elevated into 2023 even if supply chains normalize over the next year as expected. The higher interest rates will help to slow demand and, thus, inflation, but much of the current price pressures are being driven by factors beyond the Fed’s influence (i.e., global shipping and energy) — adding uncertainty to the outlook.
Go deeper with the full February’s dashboard linked below.
Sources/Disclosure
-
The information in this report is provided by Nationwide Economics and is general in nature and not intended as investment or economic advice, or a recommendation to buy or sell any security or adopt any investment strategy. Additionally, it does not take into account any specific investment objectives, tax and financial condition or particular needs of any specific person.
The economic and market forecasts reflect our opinion as of the date of this report and are subject to change without notice. These forecasts show a broad range of possible outcomes. Because they are subject to high levels of uncertainty, they will not reflect actual performance. We obtained certain information from sources deemed reliable, but we do not guarantee its accuracy, completeness or fairness.
Nationwide, the Nationwide N and Eagle and Nationwide is on your side are service marks of Nationwide Mutual Insurance Company. © 2023 Nationwide.
NFM-11859M1.3
Share
