Will there be some light at the end of the 2022 tunnel?

With Thanksgiving behind us, we look ahead and realize that there is not much left of the year 2022. After two years of a pandemic, we had hoped that the world could get back to some semblance of normalcy in 2022, but perhaps we have forgotten what “normal” really is. Because 2022 did not seem like it was normal. Sure, there were signs of normalcy – restaurants were open and packed, traffic returned to the roads, and while there were still shortages, you could find toilet paper. You just had to pay a lot more for it.

What kept us from this feeling of normalcy? Supply chain interruptions causing inflation to spike did not help. And the war in Ukraine exacerbated this situation. This led to higher interest rates which cooled the red-hot real estate market as affordability became the focus. Affording rents has been no less of an issue. All the while, the job market has stayed strong, which is the opposite of what we usually see when the Fed is trying to slow down the economy. Again, this is not normal.

Before we even mention 2023 – we still have more news to digest this year. For one, there is the jobs report to be released this Friday. Will we finally see the job market cool down? The Fed will be looking at these numbers carefully as they have their final meeting of the year scheduled in mid-December. Will we see a smaller rate increase this time around? That could signal the start of the end of the Fed’s tightening. No one is expecting a hard stop in this regard. But some light at the end of the tunnel as we close out 2022 would be nice.