Q1 2024 Quarterly Letter
In 2019 the Avenue team became increasingly focused on the high level of government debt in the United States and we sought to understand the likely path forward over the ensuing years for both monetary and fiscal policy given such an environment. We believed the choice of monetary and fiscal policy would ultimately have a large impact on both the level of inflation and interest rates, which would significantly impact asset prices. At that time, we kept an open mind about what the path ahead would look like. Five years later our view is becoming clearer: investors should expect to be in a prolonged period of higher interest rates with higher levels of inflation.