The new year saw markets peaking in the first couple of trading days with the volatility of the latter part of Q4 2021 continuing throughout the quarter. All asset classes, except for supply constrained commodities, showed remarkably consistent returns to the downside. The Federal Reserve, having just begun its rate hiking and quantitative tightening, is clearly playing catch-up to realized inflation. The risk now is whether demand in the economy is sufficiently strong to overcome higher interest rates such that the economy does not fall into recession. The hope is that the Fed will engineer the proverbial “soft landing.” We believe that recent volatility will continue through most of the year. Inflation should ease over this year and next, in line with the Fed tightening cycle, without an adverse effect on employment as there remains 1.8 open jobs for every person on the unemployment rolls.