A Higher Nominal Growth World Brings on Higher Volatility

We're observing a shift towards higher nominal growth, which generally supports equity earnings. However, this environment poses a headwind for bonds, pressuring duration despite potentially tight spreads.

Recent weaker jobs data may provide a pause for the Federal Reserve's rate hikes. This, coupled with potentially reduced Fed communication, could lead to increased market volatility.

Investors should consider these dynamics as they navigate the current economic landscape, balancing opportunities in equities with the risks in fixed income.