Wage pressure remains high and inflation is climbing — dramatically affecting the economy and just about every industry — but what does that mean going forward? Rich Mebius, portfolio manager, and Robert Spendlove, senior vice president and economic and public policy officer, took a crack at answering that question Jan. 4 during Zions Bank’s periodical Economic and Market Outlook presentation.
2022: ‘The year of potential’
“I’m calling 2022 the year of potential,” for both positives and negatives, Mebius said.
A part of that is due to actions from the Federal Reserve (the Fed). While the Fed is expected to back off on its bond purchasing and pushing stimulus into the market; interest rate hikes are expected to follow, possibly as early as March within the second quarter.
“We could see some offset of that from government spending,” Mebius added.
And, while economic initiatives in the Build Back Better bill did not pass this year, Mebius expects a pared-down approach could come about this year.
Stocks are expected to remain positive in 2022.
“We’re probably in the middle of an economic cycle, and historically that phase has generated positive returns,” Mebius said. “We’re also expecting earnings and revenue to grow for companies to drive their earnings higher.”