The Great Western Drought: What Could It Mean for Markets?

As we write this article in mid-August, authorities across the Rocky Mountains are issuing flood warnings. Monsoon rains have drenched deserts and mountains in Arizona, Nevada, Utah, Colorado, and Wyoming, with eight million Americans significantly affected. These extraordinary conditions belie an even more severe and longer-term challenge: the intense drought crisis throughout the western U.S.

Inflation Outlook: Clear as Mud

At his July 22, 2022, press conference, Federal Reserve (Fed) Chair Powell said that over the coming months, the Fed “will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2%.” Is there clear, convincing, or compelling evidence that inflation is headed that way? Not yet. The outlook is still as clear as mud. Let’s look at a few factors that inform our outlook on inflation.

A Deep Dive into Allspring’s Market Risk Monitor

Today’s topic of discussion is Allspring’s Market Risk Monitor, a report that the firm uses to capture, distill, and disseminate headline risks across the Allview investment platform. Ann Miletti, head of Active Equity, and John Hockers, co-head of Investment Analytics, go over the genesis of the report and the top ten risks Allspring currently sees in the market.

Fed Be Nimble. Fed Be Quick.

When Federal Reserve (Fed) Chair Jerome Powell took the helm of the Fed in 2018, the Fed was close to the end of its rate-hiking cycle that started in December 2015. At the time, he said the Fed would be gradual with hikes. Fast-forward to January 2022, and Chair Powell dropped “gradual” in favor of being “nimble.” Then in the spring of 2022, he said the Fed would move “expeditiously” to bring down inflation.

Seeing climate-change risk in the stock market

Last April, the California regulatory agency that oversees air quality announced its plan to encourage the sale of electric and zero-emission vehicles while phasing out the sale of gasoline-powered vehicles by 2035. If approved by the California Air Resources Board, 35% of new passenger vehicles would be required to be powered by electricity or hydrogen by no later than 2026, with 100% compliance to follow 10 years later.