The municipal market has been a relative bright spot for core fixed income investors in 2021. While most of the other “safe” parts of the core fixed income universe have generated negative returns this year, the national muni market is up for the year (through December 22). With state and local governments flush with cash due to better-than-expected tax receipts along with generous amounts of federal aid, many municipalities are in good shape. The fundamental picture for many state and local entities improved rather significantly during 2021. Coming out of the COVID-19 economic shutdowns, many states and local governments were con

We expect interest rates to move modestly higher in 2022 based on near-term inflation expectations above historical trends and improving growth expectations once the impact of COVID-19 variants recede. Our year-end 2022 forecast for the 10-year Treasury yield is 1.75–2.00%. An aging global demographic that needs income, higher global debt levels, and an ongoing bull market in equities may keep interest rates from going much higher.

Coming into 2021, we expected Treasury yields to move higher from their very low levels and they did. Higher inflation expectations, less involvement in the bond market by the Federal Reserve (Fe

We expect solid economic and earnings growth in 2022 to help U.S.  stocks deliver additional gains next year. If we are approaching—or are already in—the middle of an economic cycle with at least a few more years left (our view), then we believe the chances of another good year for stocks in 2022 are quite high. We believe the S&P 500 could be fairly valued at 5,000–5,100 at the end of 2022, based on an EPS estimate of $235 for 2023 and an index P/E between 21 and 21.5.

We expect solid economic and earnings growth to help stocks deliver gains in 2022. When forecasting stock market performance, we start w

For those of us who haven’t already started holiday vacations, we all know this was Federal Reserve (Fed) meeting week. In anticipation of how much investors would be focused on the Fed this winter, we put a chart in Outlook 2022: Passing the Baton showing how well stocks have historically handled the start of rate hiking cycles, shown below.

The chart in the Outlook 2022 publication showed stock performance in the 12 months leading up to initial rate hikes over the past 60 years. The numbers are great—an average gain of 11.5% and positive in all 9 cases. But now that the Fed has made its big pivot, the