The economy has been resilient, recession risks have diminished, and inflation has cooled sufficiently for central banks to consider cutting interest rates at some point this year. In this environment, government bonds are appealing, and while stocks have surged as investors embraced the improved odds of an economic “soft landing”, high valuations in U.S. large-cap stocks may limit upside potential.
The period of aggressive central-bank rate hikes ended last year, with a small but growing number of central banks, all of them in emerging markets, starting to ease monetary conditions. Major developed-world central banks are now able to do so for several reasons. Inflation has dropped significantly, and most major economies have recorded uncomfortably slow growth over the past year. We forecast five 0.25% rate cuts in the U.S. over the next year, although we recognize that the timing and pace of monetary-policy adjustments will ultimately be guided by the path of the economy and inflation.
The global economy continues to transition from the extraordinary economic, market and social circumstances brought on by the pandemic, and its evolution continues to present new challenges and opportunities. A driving principle at RBC PH&N Investment Counsel is to embrace these opportunities, both as the trusted stewards of your wealth, and as a wealth management business – all so we can continue to best serve your and your family’s financial and life goals.
That’s why we are excited to welcome our new clients from former HSBC Bank Canada, along with their Investment Counsellor teams, into our “RBC PH&N Investment Counsel family”. We look forward to earning your trust by delivering to you the benefits of our principles-based and holistic approach to wealth management.
And thank you to our existing clients for the opportunity to continue to help you achieve your life goals and what matters to you.
Regards,
Vijay Parmar
President,
RBC PH&N Investment Counsel
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