“Wake up and live” Bob Marley
Good morning, I’m sure most of you are back in action from a week of March Break! I was fortunate enough to spend much of the week skiing with my family and some friends down in Ellicottville, NY.
The conditions were fantastic and the kids had an amazing and memorable time. It was wonderful to be away for the first time in over two years, and it was a stark reminder of the importance of investing time and energy into yourself, your family and your future. The time away was also a reminder that for all of us, in our quest to “seize the day”, allowing ourselves to rest is just as important as deciding how we spend our time.
David Whyte, one of my favorite poets and internationally renowned author, reminds us that we, as human beings, often find it difficult to befriend the in-between spaces in life, the times when no action is required and in fact what is needed is to cease our outward activities. A sense of timelessness can be frightening, making us feel unmoored. Yet to rest is to engage in a vital conversation between what we love to do and how we love to be. The conversation of rest is not only the essence of giving and receiving, it is an act of profound remembering: imaginatively, intellectually and physiologically.
“We often berate ourselves for putting off activities on our endless to-do lists, but hating ourselves for our procrastination is a refusal to enter the deeper, foundational layer of rest from which true action can come. Rested, we can give up on our already exhausted will, and its endless need to reward itself through established goals, as the prime motivator of our endeavors. We become ready to freely participate in and contribute to the world, without being held hostage by it. We care again for the right things and the right people in the right way. In rest, we reestablish the goals that make us more generous and courageous, more of an invitation to others and the world around us. We become someone we want to remember, and someone others would want to remember too”
So if we want to be better, if we want to be effective, if we want to be great, we have to develop the day-to-day habits that allow us to seize the day, but also afford us to ensure we get the rest that we require to become who it is we are striving to be.
And now, to the markets
The volatility witnessed since Russia’s invasion nearly a month ago has subsided a bit in recent weeks. Global equities have also trended in the right direction. Bond yields have reached new highs for the year. Oil prices have retreated somewhat, as have other commodities. That being said, the military conflict in Ukraine remains very active and unpredictable. The other notable recent development came from the U.S. Federal Reserve, which raised interest rates for the first time since 2018. We provide a brief update on both issues below.
The war in Ukraine is understandably top of mind for most people. Investors remain predominantly focused on whether this conflict will be limited, in both duration and scope, or has the potential to become more drawn out and broader, involving NATO (North Atlantic Treaty Organization) countries.
Recent comments from Ukrainian and Russian officials have led investors to believe that there may be a glimmer of hope that some compromise and ceasefire can be reached. But, there is a long list of demands from both sides that needs to be addressed. Moreover, some of the regional and geopolitical experts we follow have expressed skepticism regarding the potential for a truce at this point, suggesting that it ultimately depends on Russia’s President, Vladimir Putin, whose objectives remain unclear. Many of these analysts have speculated that given the military and economic costs borne by Russia, Mr. Putin may only end this war once he can demonstrate some kind of triumph in front of the Russian public. It’s unclear what that would look like, but investors should be prepared for a wide range of outcomes.
The other notable development recently was with respect to the U.S. Federal Reserve. It began a much anticipated rate hiking campaign. Predictably, the central bank indicated the impact of Russia’s invasion of Ukraine will create additional inflationary headwinds while weighing on economic growth. It raised its estimate of core inflation over the next few years, while lowering its forecasts for U.S. economic growth. While this may seem troubling, Chairman Jerome Powell provided some reassurance by emphasizing that the U.S. economy is performing well and the probability of recession in the near future is low.
The Fed, like other central banks, seems more concerned at this juncture about inflation than growth. Fed officials are suggesting they may raise interest rates six more times this year, and another three times next year, in a rather aggressive attempt to ensure inflation does not become entrenched. Moreover, the central bank indicated it may announce plans to reduce its holdings of bonds on its balance sheet in the next few months. This is another meaningful step towards tightening monetary conditions over time, with the goal of reducing inflationary pressures.
We too believe inflation is an important risk to the investment outlook over the intermediate term. The military conflict in Ukraine will only exacerbate current price pressures because of the potential disruptions to supply chains across a range of commodities. Fortunately, the economies in North America are starting from a position of reasonable strength and can handle some degree of higher costs.
As we cruise into another busy week, take time to prioritize time, that will not only allow you to seize each day, but afford you the much deserved time to rest and recharge, it will help you on your journey towards the goals that you have set for yourself….one day at a time.
“You must live in the present, launch yourself on every wave, find your eternity in each moment. Fools stand on their island of opportunities and look toward another land. There is no other land; there is no other life but this.” Henry David Thoreau
Be well & enjoy the moments
Derek