Vanguard's Economic and Market Overview
•
Market volatility continues, with inflation and interest rates top
concern for investors
Global performance was marked with volatility in September. Central banks across the globe balance hiking interest rates to tame inflation with the possibility of triggering a
recession.
•
In the US, the Fed raised interest rates by 75bps in September. Powell affirms he will do "whatever it takes" to decrease inflation.
•
•
Mortgage rates topped 7% in September, more than doubling since the start of the year.
The British pound hit the lowest level ever after proposed tax cuts and increased borrowing by the government were announced.
Global market returns as of September 30, 2022 (%)
-4.4
Equities
-9.7
11
-18.0
-26.5
-24.9
-25.2
U.S. stocks
Non-U.S. stocks
3 months
YTD
1-year
-4.7
Fixed income
-3.1
-8.8
-12.8-12.9
-14.7 -14.6
-23.9 -24.8
U.S. bonds
Non-U.S. bonds
(hedged)
Non-U.S. bonds
(unhedged)
Balanced
-5.6
-5.8
-18.2
-18.8
-20.9
-22.1
60/40 balanced
portfolio*
70/30 balanced
portfolio**
Past performance is no guarantee of future returns. The performance of an index is not an exact representation of any particular investment, as you cannot invest directly in an index.
Sources: Bloomberg, CRSP, and FTSE.
U.S. stocks (CRSP U.S. Total Market Index), non-U.S. stocks (FTSE Global All-Cap ex-U.S. Index), U.S. bonds (Bloomberg U.S. Aggregate Float Adjusted Index), non-U.S. bonds hedged (Bloomberg Global Aggregate ex-USD Float Adjusted
RIC Capped Index hedged), non-U.S. bonds unhedged (Bloomberg Global Aggregate Index ex USD).
*
60/40 balanced portfolio Static Composite (36% U.S. stocks, 24% international stocks, and 28% investment-grade U.S. bonds, 12% investment-grade international bonds).
** 70/30 balanced portfolio Static Composite (42% U.S. stocks, 28% international stocks, and 21% investment-grade U.S. bonds, 9% investment-grade international bonds).
For institutional use only. Not for distribution to retail investors.
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