InGrow

For the past two years, conversations about the economy and markets were dominated by inflation concerns. We worried if inflation would trend lower, how the Federal Reserve would respond with interest rates, and when we might see relief. The narrative was all about inflation and the Fed.

However, while many investors and the media remained fixated on inflation, the stock market moved forward, focusing on the future rather than the present. Inflation was still high when the market started recovering, signaling that stocks were already anticipating a peak in interest rates and looking ahead to potential growth.

Today, the focus has shifted. With the Federal Reserve poised to lower rates for the first time since 2019, investor concerns have moved from inflation to economic growth and the jobs market. Recent market volatility has been linked to weak manufacturing data, but it’s important to remember that manufacturing represents a small portion of U.S. economic output compared to the services sector, which generates the majority of GDP.

The jobs market has shown signs of slowing, but it’s not collapsing. While revisions to job growth figures painted a slightly weaker picture, employment continues to grow at a steady pace.

As an investor, it’s crucial to remember that markets often thrive on worry. Just as stocks climbed the wall of inflation fears, concerns about growth may present another opportunity. Staying focused on long-term goals rather than short-term headlines is key to navigating this shifting landscape.