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.
January 2023 Commentary: Faith, Trust and Pixie Dust
Read and download the commentary here.
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