Tactical ETF 1Q22 Market Review & Outlook

April 8, 2022 — Risk assets overall remained surprisingly resilient during Q1. Going into Q2, further resilience depends on the Russia-Ukraine war not worsening, expected strong earnings results, and for the consumer to weather the inflation shock. These are a lot of “ifs” and suggests that risk assets are not appropriately pricing in macro risks. On the policy front, the Fed will lead the charge globally in the inflation fight, and the market is already pricing in the Fed’s target of 2.0% to 2.5% by year end. Rate markets have absorbed much of this pain already, which could make rate moves more muted in the coming quarters.