“2022 Market Outlook: Looking Through the Noise” | BlackRock Global Allocation Fund Managing Director Kate Moore | January 20, 2022

The Club began the New Year with a timely address in January from Kate Moore, Managing Director and Head of Thematic Strategy for the BlackRock Global Allocation Fund.  BlackRock is the world’s largest asset manager, with $9.5 trillion in assets under management.  Ms. Moore provided a financial market forecast for 2022, a year she said that is starting with a lot of uncertainty.

“2021 was a really unusual year for asset returns,” she said.  “There were only three other times in the last thirty years where stocks were up and bonds were down.  We’re in an even more unusual place to start 2022 where both stocks and bonds are down.  It’s not ideal.  We forecast strong growth for the U.S. economy but it will be uneven at times and at a much slower pace than last year, simply because we’re not coming out of the depths of pandemic behavior,” said Moore, adding that she expects by year’s end that stocks will again be up and bonds will be down.

She also discussed inflation, its impacts on monetary policy, and both supplier and consumer costs.  “This is a really complex environment for monetary policy…markets stop panicking when Central Banks start panicking.”  While some inflation is transitory, such as computer chip shortages and other sectors where demand outstrips supply temporarily due to the pandemic recovery, Moore said that core consumer price increases are not transitory.  “The CPI (Consumer Price Index) is up 9.5%, groceries are going up 5.5% at this point, and while prices are going up, the volume of the product, such as cereal, is going down, so there’s less value,” Moore said.

In this period of rapid inflation, she also addressed how companies are passing along costs to consumers.  “Large companies are able to eat the cost but smaller to medium size companies cannot and have past the costs on,” she said.