The U.S. economy continues exhibiting late-cycle dynamics with high growth and inflation but slowing on a rate-of-change basis. Global PMIs are rolling over to contractionary territory (< 50), with investors’ expectations for inflation softening. The Fed continues to tighten monetary policy to combat inflation at the expense of economic growth and financial market liquidity. The tightening of financial conditions has driven volatility in equity and fixed-income markets and led to significant US dollar appreciation. Correlations between assets have reached historically high levels, leaving investors no place to hide. While portfolios are positioned conservatively for a recession in 2023, preparations are being made to lean into assets that we believe will perform well after any economic turmoil we may experience. Click "Market Outlook" to download our Q4 2022 investment outlook.