January 2023 Commentary: Faith, Trust and Pixie Dust

Summary

•  It’s been a great start to the year for markets; both stocks and bonds ended January with decidedly positive returns. The NASDAQ Composite enjoyed its best January since 2001, ending the month up 10.7%.
• Most central banks have continued to raise interest rates, and tighter monetary policy has helped bring inflation down from multi-decade highs.
• One exception is the Bank of Japan, which has been compelled to maintain its ultra-easy monetary policy—injecting significant liquidity into the global financial system—despite the country experiencing its highest inflation in over four decades.
• The market’s response to Japan’s continued quantitative easing suggests that investors may be losing patience with central banks that use a heavy hand to carve an extreme path.

Read and download the commentary here.