Though stocks showed some early-April gains, they sank through quarter end to close near the lows for the current drawdown. Though non-U.S. stocks performed a bit better than domestic equities during the quarter, investors saw red across the board as they pondered the consequences of a global interest rate hiking cycle meant to target inflation that’s proved far slower in transit than broadly though likely early on.

Meantime, bonds offered little respite from the negativity, furthering their historically substantial decline. Bonds still provided relative safety from the plunge in stocks over the quarter but declines across the fixed income landscape left investors only relatively—not absolutely—better off, the less aggressively their portfolios were positioned coming into the year’s equity drawdown. Short-term rates held mostly steady later in the quarter, while the flattening of the longer end of the curve may reflect the view that the Fed could win its battle against inflation, but at the cost of a recession.