2023 Executive Summary – Stable Value Investment and Policy Report
From an economic perspective, there was significant progress in 2023 toward sustainably
lower inflation against the idiosyncratic volatility caused by the banking crisis, both in the U.S.
and abroad. The progress in fighting inflation and the lagged impacts of an elevated policy
rate, led the Fed to pause the tightening cycle after reaching the 5.25%-5.50% level. Elevated
yields kept pressure on depressed market to contract ratios but also provided the spark
for higher crediting rates (+50-60 basis points) in most products. As the probability of a soft
landing and a goldilocks outlook increased throughout the year, the stable value industry
was challenged by participant outflows that were attributed to robust equity returns.
