Monthly market perspectives

Our investment and economic outlook: September 2022

September 01, 2022

Asset-class return outlooks
A table presents Vanguard’s expectations for the ranges of annualized returns, as well as median levels of volatility, for nine classes of equity securities, eights classes of fixed income securities, and the rate of U.S. inflation. All of the projections are based on the June 30, 2022, running of our Capital Markets Model.  For equities, the projections are: U.S. equities, 4.1% to 6.1% returns and 17.2% volatility; U.S. value, 4.4% to 6.4% returns and 19.5% volatility; U.S. growth, 1.6% to 3.6% returns and 18.2% volatility; U.S. large-cap, 4.0% to 6.0% returns and 16.8% volatility; U.S. small-cap, 4.3% to 6.3% returns and 22.5% volatility; U.S. real estate investment trusts, 3.9% to 5.9% returns and 20.2% volatility; global equities excluding the United States (unhedged), 6.6% to 8.6% returns and 18.6% volatility; global ex-U.S. developed markets equities (unhedged), 6.5% to 8.5% returns and 16.7% volatility; and emerging markets equities (unhedged), 5.9% to 7.9% returns and 26.5% volatility.   The rate of U.S. inflation is forecast at 2% to 3%, with 2.4% volatility.
A table presents Vanguard’s expectations for the ranges of annualized returns, as well as median levels of volatility, for nine classes of equity securities, eights classes of fixed income securities, and the rate of U.S. inflation. All of the projections are based on the June 30, 2022, running of our Capital Markets Model.  For fixed income securities, the projections are: U.S. aggregate bonds, 3.1% to 4.1% returns and 5.1% volatility; U.S. Treasury bonds, 2.7% to 3.7% returns and 5.4% volatility; U.S. credit bonds, 3.7% to 4.7% returns and 5% volatility; U.S. high-yield corporate bonds, 5.7% to 6.7% returns and 10.2% volatility; U.S. Treasury Inflation-Protected Securities, 2.3% to 3.3% returns and 4.9% volatility; U.S. cash, 2.6% to 3.6% returns and 1.3% volatility; global bonds ex-U.S. (hedged), 3% to 4% returns and 4.1% volatility; and emerging markets sovereign bonds, 5.4% to 6.4% returns and 11.9% volatility.   The rate of U.S. inflation is forecast at 2% to 3%, with 2.4% volatility.
Region-by-region outlook

United States

Stocks start to recover before recessions end
alt text

Euro area

China

Emerging markets

Big Fed rate hike coming in September?
Inflation continues at high levels
Job numbers exceed expectations
Market perspectives: September 2022
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