Chart of the Week 6-7-2022

As sources of US inflation have continued to be broad-based, equity returns have remained challenged. Historically, the equity market has fallen 2% on average in the 6-month run up to an inflation peak. However, in the subsequent 12 months after a peak, we’ve observed strong equity market returns averaging 10%, even if a recession ensued. We believe equity markets may be well positioned for a recovery should inflation normalize.