Tactical Investment Strategy, March 2022

March 9, 2022 — The Russian invasion of Ukraine is the dominant macro influence now and is likely to remain so for a while. The near-term repercussions have been risk-off in markets, lower rates, and spiking energy prices. From a market and economic standpoint, the broader implications include the possible stalling of a post-Omicron economic growth rebound, higher inflation pressures due to energy prices, and disruptions to an already-fragile global supply chain. This also puts the Fed and other central banks in an even more precarious position of fighting inflation during a major geopolitical conflict while growth is already beginning to slow. Central bank policy will be the driving factor to returns this year, but extremely low visibility into the war in Ukraine suggests keeping risk toned down and maintaining a more defensive mindset overall.