Equities declined sharply in anticipation of Fed policy tightening. First emerging last month with weakness in pockets of growth, the market’s acute sensitivity to rates came to the forefront in January. With the Fed intent on a series of rate hikes in 2022, markets could no longer justify their elevated valuations. Similarly sensitive to rates, bonds fell in tandem with stocks leaving little room for diversification. Nonetheless, long-term earnings forecasts remain strong.