Q1 Macro Update with Lara Rhame

Chief U.S. Economist Lara Rhame reflects on Q1 so far.

About this episode
*Disclaimer: Our hearts continue to go out to those impacted by the ongoing crisis in the Ukraine. This episode was recorded on 3/3/22 and reflects views on the events as they stood at that time.

As the end of the first quarter quickly approaches, Investment Research Director Kara O’Halloran and Chief U.S. Economist Lara Rhame analyze the key trends and events that have impacted markets both domestic and internationally. They cover the unfortunate crisis that continues to unfold in the Ukraine, Lara’s predictions around U.S. growth this year, thoughts on impending rate hikes and the state of the yield curve.

Transcript excerpt:

Kara O’Halloran (00:16):
So I have to break the fourth wall for a second. We recorded a version of this podcast a little over a week ago, and were all set to release and then the news broke of Russia invading Ukraine.

Lara Rhame (00:27):

Kara O’Halloran (00:28):
We did record an emergency podcast that day with some of our initial thoughts and reactions. We’ll get into more of that during this episode, but I still want to talk about a lot of the things that we talked about on that episode, which was really a mid quarter check in all things markets and economy. But I think it’s really important to rerecord it from our new paradigm. Right?

Lara Rhame (00:52):

Kara O’Halloran (00:54):
So thank you to our producer, Aaron, for bearing with us through all of this, but we’re excited to dig into all of this. So Lara, let’s start with the thing that has been top of mind for the last week, Russia-Ukraine. In our initial episode, the first thoughts were, “Okay, probably not a major direct U.S. impact.” Have your views changed now that we’ve had a week or so to digest all of the news?

Lara Rhame (01:21):
Yeah. I don’t think there’s anything more difficult than looking at just the horrible humanitarian crisis that’s developing there. I know you and I both are just thinking so much of people whose families are in danger, of people who are on the front lines there. I think to the extent that we just do want to focus on just the U.S. economy, what the direct impact is. The impact on growth right now is not expected to be significant. By that, I mean, Russia is not a significant trade partner for the U.S. and a lot of the big Ukrainian exports like wheat and corn are not going to be a disruption for us because those are things that we produce.

Lara Rhame (02:18):
Inflation is something that may really impact our economy or continue to impact our economy. We’ve seen in the wake of the invasion oil prices just skyrocket and they were already elevated. Grain, some of those other commodities across the board have also risen significantly. So just really tough timing given that households were already experiencing price pressure in energy and food. I know that’s something we’re going to talk about in depth, but from my perspective, the really direct impact on the economy is less obvious, and we may yet get some secondary impact, but that may take time to develop.

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Kara O’Halloran, CFA

Director, Investment Research

Lara Rhame

Chief U.S. Economist + Managing Director

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