I love Thanksgiving. Not only is it a time to give thanks, but it is also a time to eat. And for many that know me, I love to cook, and I love to eat. I love the numerous side dishes that come along this time of year; stuffing, potatoes, green bean casserole, and fried rice (Chinese Thanksgivings always hit a little differently). As I get older, the problem is digesting all that food. A day of feasting is often followed by a day of bloating and indigestion: Bubble water, Tums, and Pepto.

In America, Thanksgiving week is usually a calm one. Because of the midweek holiday, there normally isn’t much market activity for the rest of the week. But this week was different. It started early on Monday when President Biden re-nominated Jerome Powell as head of the Federal Reserve. Dr. Lael Brainard, his competitor, was apparently the more dovish of the two; she favored lower interest rates for longer. So, when Powell was reappointed, the markets took notice. Bond markets immediately became concerned that the Fed will raise interest rates soon. Investors quickly priced in three quarter point rate hikes next year. Bonds sold off and had one of the worst days this year, sending interest rates on the benchmark 10-year Treasury near 1.70% again. Surprisingly enough, stock markets held up well on the news.

The week ended much differently, however. Worries about a new COVID variant, Omicron, spreading throughout Africa sent stocks reeling. The Dow Jones Industrial Average fell almost a thousand points, one of its worst days in a year. However, after selling off on Monday, bond markets recovered and posted one of the largest gains this year. In the course of less than week, the bond market had one of the largest selloffs and recoveries in 2021.

The wide-ranging events of this past week seems like a microcosm of 2021. Markets are dominated by the push and pull story between inflation and COVID. These situations are so intertwined. As the year draws to a close, we began to consider the key concerns that investors face in 2022. This is what we came up with, in order of least to most concerning.

5.) Politics: The headline topic of the day that causes more indigestion than anything else.  The good thing is that it doesn’t impact investors as much as you’d think. Politics goes back and forth every few years. With 2022 being a midterm election year in America, good luck! It’s not just America. For the first time in 16 years, one of the largest economies in the world will see a new leader. Germany is the anchor of continental Europe, and a leadership change there is sure to be followed. (Political issues ranked higher on my list until this morning’s announcement that Matthew McConaughey won’t be running for Texas governor).

4.) Corporate Profits: Large American companies have seen stellar profits this year despite all the headlines about rising wages and supply constraints. Profit margins are at highs not seen in decades. Prolonged supply issues will probably erode margins for the next few quarters, but will it be longer than that? With valuations at historical highs, higher profits will be needed to justify those valuations.

3.) COVID: Quickly spreading around the globe, Omicron is a major concern right before the holidays. But omicron is one of over a dozen variants of COVID. This will be a lasting issue for the supply chain and, thus, inflation. The good thing is that with all the advancements in gene technology, vaccines can be updated. Pfizer and Moderna claim they will have a new vaccine ready within a few months. So as more world citizens get vaccinated, these variants should be less and less of a disruption.

2.) Inflation: The bogeyman in this conversation. One part of the recent spat in inflation is no doubt related to supply constraints. There is no shortage of reasons, from jammed boats in the Suez Canal to the lack of truck drivers. We continue to think that the recent rise in prices is temporary, but is it? American’s consumptions patterns have drastically changed, but how long will that last? Inflation here in America gets most of the attention. Still, places like Turkey and South America are seeing huge inflation spikes.

1.) Interest Rates: Of course, it’s more than just interest rates; this really should be called monetary policy. All of the above issues funnel down to how global central banks deal with the flow of cash and capital. What they do encompasses more than just interest rates; how central banks deal with inflation and shocks to the system will continue to be center stage.

That leaves us with the unknown unknowns, much like how COVID shocked the world at the beginning of 2020. This list looks much like last year’s list. A year ago today, COVID was much more of a concern for 2021 than inflation, but still an issue nonetheless. After 2020 and 2021, 2022 looks like it might be a catch-up year. A year to digest all that we just went through. A little indigestion might be in order, but nothing a strong company with an enviable product lineup and healthy cash flows can’t get through.