April Market Insight
As we enter the second quarter of 2026, the economic narrative is shifting from a ‘waiting game’ on interest rates to a deeper look at the fundamental health of the consumer and the changing face of inflation. Our commitment to active management means we don’t just react to the headlines; we look at the underlying dynamics that affect your ‘Work Optional’ milestones.
The Evolution of Inflation: From Housing to the Power Grid
For the past two years, ‘Housing’ was the primary culprit behind sticky inflation. While housing prices have finally begun to stabilize (cooling to roughly 3.3%), a new inflationary front has opened: Utilities and Core Goods. Electricity prices are up 8% and natural gas has surged 13% since mid-2024. Simultaneously, durable goods manufacturing inputs have spiked to 14.4% as of early 2026.
Q1 Economic Forecast: The “Low-Hire, Low-Fire” Reality
Deloitte’s Q1 2026 forecast projects modest US growth of 1.2%—a step down from the 1.7% we saw in 2025. We are seeing a ‘soft’ labor market where companies are hesitant to hire but equally reluctant to let go of talent. With inflation edging higher in this first half of the year, the Federal Reserve is widely expected to hold rates steady until at least December 2026.
Our Take: High rates are staying longer than many ‘passive’ investors hoped. This ‘Higher for Longer’ environment creates air pockets for companies with heavy debt loads, but provides opportunity for those with clean balance sheets. We continue to prioritize ‘Discrete Growth’—focusing on sectors that can thrive on productivity and AI integration rather than those reliant on cheap credit.
Strategic Outlook
While the 24-hour news cycle focuses on volatility in the Middle East and trade tariffs, we focus on the math. Your portfolio is designed to navigate these murky waters by prioritizing liquidity and risk management. We aren’t trying to time a ‘perfect landing’; we are building a durable vehicle for the journey.
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