VUG - Vanguard says inflation will remain sticky and a recession can be pushed out to 2024

2023-07-05 13:40:31 ET

Vanguard highlighted three themes that remain as Wall Street turns the page to H2; persistent inflation, tight labor markets, and rising policy interest rates. Moreover, the exchange traded fund issuer also outlined in its midyear 2023 outlook that they see inflation remaining sticky and that a recession can possibly be pushed off into 2024.

“We foresee continued progress in the fight against inflation, with central banks having to keep interest rates in restrictive territory for longer. And with that, we anticipate some economic weakness in the months ahead,” Vanguard stated.

Additionally, the fund issuer outlined that they anticipate and expect it will not be until late 2024 or even possibly 2025 before the Federal Reserve observes that inflation has fallen back to their 2% target goal.

Vanguard also expressed that the last leg down in inflation can be the most challenging aspect for the Federal Reserve as well.

Regarding the idea of a 2023 recession, Vanguard said that could be pushed out, stating: “We still assign a high probability to a recession, though the odds have risen that it could be delayed from 2023 to 2024.”

Listed below are some popular Vanguard ETFs and their 2023 returns:

• Vanguard S&P 500 ETF ( NYSEARCA: VOO ) +16.3% .
• Vanguard Total Stock Market ETF ( NYSEARCA: VTI ) +15.7% .
• Vanguard FTSE Developed Markets ETF ( NYSEARCA: VEA ) +8.5% .
• Vanguard Value ETF ( VTV ) +1.4% .
• Vanguard Growth ETF ( VUG ) +33.6% .
• Vanguard Total Bond Market ETF ( NASDAQ: BND ) -0.3% .

More on Markets:

• AllianceBernstein doesn’t see a hard landing and says Q3 may struggle to find a direction
• TD Securities thinks oil can rebound higher over the next 6-months
• UBS says the DXY is in a make-or-break position to start the week

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