I recently turned 50. On the evening of my birthday, my wife and two sons wished me an ‘old-man’ happy birthday as we gathered for dinner. I responded, “It’s just the first 50. I’m getting a second. I’m going to live to 100. Even if it kills me.”

My 14- and 12-year-old boys take every shot they can at their old man. The competition between us generates plenty of good humor…and today I shot back.

US Equities proved their resolve – posting impressive gains for the quarter. Inflation remains an issue, although the severity is declining. The economy still seems fine and the record rise in the Fed Funds rate from effectively 0% to 5% is starting to create some visible damage (bank failures, higher costs of debt, ongoing layoff announcements, growing concerns in real estate).

WLA’s CURRENT VIEW:

Volatility as of March 14-16, 2023 is creating profound changes in the Treasury market…5% Treasury yields were a great buy last week and remain attractive today. As rates have declined in recent days, this is not good (for future bond allocations) if bonds revert to being a low return asset class again. The Fed has created a very difficult situation (high inflation + bank stress) which makes it even more difficult to manage the direction of rates in 2023.