With inflation rising and interest rate hikes looming, many investors are wondering if the markets can continue their bull run. To help investors better understand where markets are right now and where they may be going in 2022 and beyond, Intertrust Group recently spoke with Axonic Capital Partner and Head of Business Development Peter Carey at iConnections’ Global Alts Conference for insight.
“We’ve had a very long run in equities, even longer run in the bond market, and I think it’s going to be muted going forward,” says Carey. Concerning inflation, he explains that no matter if it ultimately ends up being transitory or permanent, inflation is here, and it has put the U.S. Federal Reserve in a tough spot. “They have to thread a needle in that they have to figure out a way to curb inflation without doing damage to the overall economy,” Carey explains.
If the Fed does ultimately raise interest rates like they have alluded to in previous meetings, investors must take the right steps in this environment in order to maintain healthy returns. “I think we are entering a rising interest rate environment, and, in that environment, I think an investor needs to focus on managers that have exposure to floating rate securities,” Carey tells Intertrust Group. “I also think it’s important, given where inflation is, to focus on hard assets, especially hard assets that have cash flows. I think that’s important going forward.”