This Month's Newsletter

March 14, 2022

Welcome to March! After a rocky start to the year, it looks like this month may continue the bumpy road we’ve been on as markets digest the Russia-Ukraine conflict, the expected interest rate hike, and the possibility of more inflation.

Russia invaded Ukraine. Russia invaded neighboring Ukraine in late February. The attack sparked a global outpouring of support for the Ukrainian people and harsh economic sanctions on Russia. What’s next is hard to say, given how fluid the situation is on the ground. As Russia finds itself more isolated – geopolitically and economically – we’ll see what impact that has on global markets.

All eyes on the Fed. The Federal Reserve is expected to increase interest rates this month. Higher interest rates impact all corners of the economy, from mortgages to credit cards to business loans, and they can also be one of the ways to potentially reduce inflation. The anticipated increase in interest rates means some investors are hedging, moving away from growth-oriented investments in favor of more stable, cash-flowing one, which tend to be less sensitive to changes in interest rates. The continuation of this trend may contribute to elevated volatility in the coming month, but remember: market fluctuations are expected, and historically, markets always recover.

What’s next for inflation? The leading contributors to inflation are food- and energy-related costs, including gas, used cars and trucks, and food staples. February’s year-over-year Consumer Price Index (CPI), the most-often cited measure of inflation, came in at 7.9%, an increase of .40%. There are some concerns that economic sanctions levied against Russia – including the banning of all oil imports – will contribute to immediate-term inflationary pressures at home. We’ll be closely watching CPI over the next few months to see what impact sanctions and likely higher interest rates may have on inflation’s momentum.


February saw more red than green again as stocks were whipsawed by the Russian invasion of Ukraine and the anticipated interest rate hike in March.

Sector Performance

Energy continues to outpace all other sectors, adding another 7.13% in February to finish up 27.59% year-to-date. However, with sanctions set to fall into place, it bears watching to see if Energy stocks can continue to outperform the broader market.

The Energy sector contains stocks like Chevron, Exxon Mobil, and ConocoPhillips.


US government bonds offered some safe haven from the rockier equities markets, ending February essentially flat. The anticipated interest rate hike sometime in March has likely contributed to negative performance year-to-date.

Economic Update

Economic fundamentals remain strong. In spite of volatility, the economy is exhibiting several positive indicators:

  • Unemployment continues to improve, falling to 3.8%
  • Job creation has been robust, with another 678,000 jobs created in February
  • The US is the only G7 country back to its pre-pandemic GDP

Inflation and supply chain concerns have overshadowed what has otherwise been a robust turnaround by the US economy in terms of GDP. GDP stands for gross domestic product and it’s a reliable measure for the productivity of a given country.

Past performance shown is not indicative of future results, which could differ substantially. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.  All investments include a risk of loss that clients should be prepared to bear. The principal risks of The Clifford Group strategies are disclosed in the publicly available Form ADV Part 2A.