Wage activity has picked up significantly in the United States, and consumers are in a much better position to spend than in prior tightening cycles. This is the first of the good points we discuss with Eric Souders and Nigel Jenkins from Paydel & Rygel Investment Management in terms of the outlook for the bond market. Household cash is in very good shape -but inflationary pressures increase alongside wage pressures. In the last of the ‘good’, the shape of the yield curve does not signal towards a recession in the US just yet. In terms of the bad, markets face decelerating growth, accelerating inflation and icreased central bank activity – however the team at Payel expects inflation to subside, with some early indicators suggesting it may have already peaked. On to the ugly – with both stocks and bonds performing less than admirabily in the first quarter and correlations turning sharply positive. We also touch on Russia’s invasion of Ukraine affecting supply chains.