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LPL Financial Research Outlook 2022: Passing the Baton

LPL Research Outlook 2022: Passing the Baton is designed to provide insight and analysis for the next set of challenges the economy and markets may face. While the economy continues to move forward, we’re still feeling some aftershocks of COVID-19 and the Delta variant.
We see 2022 playing out as a handoff—from stimulus bridging a pandemic recovery to an economy growing firmly on its own, with consumers, productivity, small businesses, and capital investments all playing a part. Inflation must be closely watched, but LPL Research believes recent price pressures are transitory, and that the strong economic recovery may continue to drive strong earnings growth and support further gains for stocks. The strong economic recovery and potentially higher inflation expectations may help push interest rates higher and lead to flat or potentially negative core bond returns in the second half.
We’ve had a hand up that has helped us through a period of unique economic challenges. In 2022, the economy may be ready for a handoff, back to a greater emphasis on the individual choices of households and business. How smoothly that handoff is executed may determine the course of the recovery. LPL Research’s Outlook 2022 is here to provide insight on the economy, stocks, and bonds and what may lie ahead for next year and beyond.