Leading SA: President of Direct Investor Business for Victory Capital discusses the economy, inflation

Nikhil Sudan says we are not feeling some effects here in the Alamo City

SAN ANTONIO – One of the topics on so many families’ minds across the country is the economy — inflation, stock market woes, and interest rates — there is so much going on — and many questions.

President of Direct Investor Business for Victory Capital, Nikhil Sudan, joined Leading SA to break down the current economy and plans going forward.

“Well, I think we’re certainly are in a period of very high economic uncertainty, and the stock and bond markets certainly reflect what is going on in the broader economy,” Sudan said.

There are several factors at play that are impacting businesses and families.

One, inflation is still very high at over 8%. It first started showing up in all the products that we buy in stores, but now increasingly is showing up in the services that we all pay for, like insurance, rent, health care, and many other things like that. The Federal Reserve has raised interest rates five times this year. They have clearly signaled that they will keep raising rates till they curb inflation, even if it means slowing down the broader economy,” Sudan said.

That impact is also being felt in the housing market.

If you look over the past year, housing sales are down almost eight months in a row, and that’s because mortgage rates have more than doubled over the past year, which, of course, makes housing less affordable. The good news is housing prices are still relatively stable, which means that for most homeowners, their homes are worth more than they paid a year or two ago,” Sudan said.

Luckily, we aren’t feeling that effect here in the Alamo City.

Here in San Antonio, we are very fortunate because we are in one of the fastest growing major markets in the U.S., which bodes well for housing and services demand and in our region,” Sudan said.

Although there is a lot at play, there are a couple of silver linings.

“It’s not all doom and gloom. If you look at the labor market it’s still strong. Employers are still hiring. Employment is unemployment is relatively low and wages continue to increase. And now some prices are actually even trending down,” Sudan said.

Additionally, inflation has increased social security.

If you’re on Social Security, your benefits are going up 8.7% next year, which are 70 million people in the U.S. who are covered by such programs is good news,” Sudan said.

Obviously, this mix of factors increases the risk of recession.

I think when you look at what markets are signaling, this certainly is a very high risk of recession. And it’s typically a feature of when the Fed raises interest rates so much, the whole goal is to slow down economic growth. Now, it’s always a tight balance for the Fed to balance growth versus keeping inflation under control. But certainly the risks are very high at the moment,” Sudan said.

For families around the country, there are easy strategies to plan for the future.

One, investing early and two, investing often. Investing or any means taking advantage of time. It’s really never too late to start investing, especially if one is considering long term goals. Retirement, buying a home saving for kids. College just get started at any amount that’s comfortable for you. Investing often means being proactive and investing in a regular schedule. For example, an automatic investment plan into mutual funds. This is a strategy where you invest a set dollar amount on a monthly or weekly schedule. Now, investments are not guaranteed against loss, but investing on a regular schedule can help you take advantage of ups and downs in the market,” Sudan said.

If you want to learn more about Victory Capital, you can find resources and tools HERE.

About the Author:

Max Massey is the GMSA weekend anchor and a general assignments reporter. Max has been live at some of the biggest national stories out of Texas in recent years, including the Sutherland Springs shooting, Hurricane Harvey and the manhunt for the Austin bomber. Outside of work, Max follows politics and sports, especially Penn State, his alma mater.