If Kelli and Fei Wang’s house had a soul, it would be the walk-in closet.

The house, in Chicago’s Ukrainian Village neighbourhood, is designed around the couple’s love for fashion and includes a 300-square-foot custom closet, with charcoal-suede wall covering and cerused-oak shelves, amplified by a vanity within a 40 x 60 inch mirror. There is a separate accessories side room, modelled after a showroom, where Kelli’s collection of designer bags and shoes sit on shelves and where she hangs out on a silver love seat.

In the couple’s previous home in Chicago’s Lincoln Park, they had to change out their wardrobes every season, hauling clothes from their apartment to their storage unit in the building’s basement, because there wasn’t room for it all upstairs.

“I wanted to never do a closet swap again,” says Kelli, 42, dressed in a floaty, cream-coloured shirt dress from Sandro Paris and light pink Manolo Blahnik pumps. “The closet was the first thing I thought about for the house.”

The Wangs bought their Ukrainian Village property for $511,000 in 2016 and tore down the existing 2,500-square-foot, three-bedroom, old brick home on it. The new house, finished in 2021, is 5,000 square feet, has three bedrooms and cost $1.8 million, with about $100,000 of millwork, carpet and furnishings going into the primary closet alone.

To design the house, the couple hired Dan Mazzarini, the principal of New York-based BHDM Design, who was a director of store design at Ralph Lauren for six years and also worked on Michael Kors, Calvin Klein and Kate Spade retail spaces.

Mazzarini knew Kelli from college, and understood the couple’s love for fashion: they’d shopped together many times in New York, where Fei had a special affinity for the Ralph Lauren store on Madison Avenue.

“I wanted to live in the Ralph Lauren store,” says Fei, 46, dressed in a custom-made Pini Parma shirt and a Boggi sweater. “It makes you feel elegant, elevated, and classy.”

As a guide for the house’s overall aesthetic, they decided on “Ralph Lauren meets Tom Ford, a mixture of buttoned up and timeless sophistication and sexy, modern, crisp elegance,” says Mazzarini. That meant a lot of black, white and charcoal.

That mixture can be seen throughout the house. In the living room, open from the kitchen on the main floor, a Ralph Lauren influence can be seen in the classic white sofa, while the angles of the coffee table and the chairs are more Tom Ford, says Mazzarini.

Tom Ford comes out in the kitchen, where the black granite counters, black-matte open shelves and stainless-steel appliances have a “refined industrialism,” says Mazzarini. The dining room has a crafty Ralph Lauren chandelier and white leather chairs.

On the second floor, Fei’s office is “menswear-oriented” It has a modern, crisp, geometric style, with a glass coffee table, an oversize black linen sofa, and dark grey flannel curtains, like a suit, says Mazzarini. The red fox fur and brown velvet pillows, the rosewood desk and the nubby rug add more classic textures.

The primary suite, with its bathroom and the centrepiece closet, takes up the entire third floor. It is designed in part after the Bulgari Hotel Milano, where the couple stayed on one of their first trips to Italy. The furnishings include grey-velvet drapes, an ebony headboard, a leather bench and a large brown-velvet armchair.

When designing the closet, Mazzarini says he asked the couple how many suits, shoes, bags and accessories they had—and that number kept growing as the home-building process progressed, going from around 50 to more than 100 pairs of shoes for each. While the overarching goal was beauty and style, it also had to be comfortable—and to reflect what Mazzarini calls the couple’s “Midwestern warmth and hospitality.”

Fei was born in Shanghai and grew up in Chicago, where his father was getting a Ph.D. in chemistry. Living on a teacher assistant’s budget didn’t leave much for buying designer clothes, but Fei says he “always had an eye for fashion—it was innate.” He says his parents, who grew up when many Chinese people wore blue worker’s suits, weren’t interested in subsidising his passion, so he started working in a clothing store when he was 14 years old. The first suit he bought himself was from Banana Republic.

He graduated from Illinois State University in 1999 and then from the University of Chicago with an M.B.A. in 2004. He went to work in asset management at Morgan Stanley, then to J.P. Morgan Asset Management and UBS before landing again at Morgan Stanley in 2021, where he is now a senior vice president in family wealth management.

Kelli also remembers a passion for fashion from a young age. Growing up in Piqua, Ohio, north of Dayton, she couldn’t afford to buy designer clothes, so she mixed and matched, she says. She graduated from Miami University in Oxford, Ohio, and went to work at J.P. Morgan Asset Management before moving on to Merrill Lynch and Centric Wealth Management in 2018, where she is currently director of financial planning.

Fashion is central to the couple’s relationship. When they first met in 2008, when they were both working in J.P. Morgan’s wealth management unit in Chicago, each noticed the other’s clothes. “She was chic and classy,” says Fei. “I pay attention to style.” Kelli remembers the first time she saw her now-husband walk by in a suit. “He looked the Wall Street-financier part,” she says.

After their wedding in Lake Como, Italy, the couple honeymooned at JK Place (now called The Place), in Florence, a hotel that also influenced the design of their home. They started traveling to Italy and France every year because they love traveling and shopping together, and they both appreciate the goal of having the best experience possible, whether it is food, art, clothing or design. “The downside of that is there’s no voice of reason,” jokes Fei.

The Wangs say they have passed their fashion appreciation on to their 2½-year-old daughter, Gemma, who loves to hang out in the accessory room of the closet, where she tries on her mom’s shoes. In Gemma’s own bedroom, a shelf is filled with miniature designer bags: Gucci, Chanel, Prada, Louis Vuitton. “She has a better sense of style than both of us,” says Kelli.

Wall Street entered 2024 betting the year would go perfectly, but an up-and-down start for stocks and bonds suggests the going won’t be easy.

Stocks have climbed to records, driven by cooling inflation that has spurred investors to anticipate as many as six interest-rate cuts. Falling rates often boost share prices by reducing the relative appeal of bonds and making it cheaper for companies and consumers to borrow, lifting corporate profits.

But despite Friday’s record close in the S&P 500, the rally in major indexes has stalled in recent weeks—the benchmark index is up less than 2% from where it was a month ago—while the labour market and economy show few signs of slowing. Bond yields have ticked up in the new year after falling sharply at the end of 2023.

This dynamic is prompting some analysts and portfolio managers to warn that further stock gains might be halting because the rate cuts that are widely expected to power the market higher might not arrive as quickly as bullish investors had wagered.

“Clearly, the consensus is that inflation is under control and we’re heading for a soft landing,” said Doug Fincher, a portfolio manager at New York City-based hedge fund Ionic Capital Management. “It’s certainly possible—but a lot of that is priced in.”

The S&P 500 is up 1.5% this year, but analysts see more signs of caution under the hood.

Investors have retreated this year from shares of banks, smaller companies and real-estate firms that posted big gains during the fourth-quarter rally, which was kicked off by investor belief that the Federal Reserve had pivoted in November to a rate-cutting stance. Bond yields, which rise when prices fall, have climbed as traders have pared back bets that Fed officials will start cutting rates in March.

There is a greater than 50% chance the central bank keeps rates where they are at its March meeting, according to the CME FedWatch tool. At the start of the year, traders expected rates to end December around 3.85%. Now they expect closer to 4.1%, per futures contracts tied to the fed-funds rate.

Behind those moves: data showing persistent economic strength that could lift inflation. Treasury yields, a benchmark for borrowing costs, surged last week after Fed governor Christopher Waller cautioned against rushing to cut rates. Yields’ climb continued after data on retail sales, housing starts and unemployment filings all beat economists’ projections. The 10-year U.S. Treasury yield finished the week at 4.145% after starting the year at 3.860%.

Traders are now betting inflation will average above 2.4% over the next five years, the highest level since November, based on swap contracts tied to the consumer-price index.

The Russell 2000 index of small-cap stocks—which gained 22% in the last two months of the year—is down 4.1% in January. Speculative stocks have taken a beating; both Rivian and Coinbase have lost more than 25% after rising during the Fed-pivot rally. A KBW index of regional banks, which added 31% in November and December, has slid more than 3%. Shares of real-estate and utility companies are down even more, also having surged in those months.

The Bloomberg Barclays aggregate bond index, which soared in the final months of last year, is down 1.4% to start 2024.

“People tried to front-run the rate cuts by buying long-duration assets, like tech stocks and bonds,” said Nancy Davis, founder of asset management firm Quadratic Capital Management. “What if the Fed doesn’t cut that much or that quickly? Those people get hung out to dry.”

The Atlanta Fed’s GDPNow model shows the economy likely grew at a 2.4% inflation-adjusted pace in the fourth quarter. That is nowhere near the conditions that have historically necessitated rates coming down 1.5 percentage points—which traders were betting on heading into 2024.

The extra compensation investors receive for buying high-quality corporate bonds over Treasurys is slimmer than before the Fed began raising rates, now around a percentage point. Credit spreads on junk bonds are similarly tight, signaling little concern over company defaults. Leveraged loans—used to fund private-equity buyouts or finance poorly rated companies—are in such high demand that companies are slashing their borrowing costs.

Some investors believe a strong economy could still boost stocks.

Sophia Drossos, an economist and strategist at Stamford, Conn.-based hedge fund Point72, expects robust consumer spending—and a proactive Fed—to help avert a recession and prop up corporate profits. The strong underlying U.S. economy “means risky assets can benefit,” Drossos said.

Not everyone is optimistic. Some fear new sources of inflationary pressure, such as trade disruptions from the Houthi attacks in the Red Sea and a drought in the Panama Canal.

And technical factors also could undermine the market gains. Interest-rate bets often represent investors protecting their portfolios against the risk of a recession or crisis that requires sudden rate cuts. Without a major slowdown, investors might remove those hedges, raising market rates. That could tighten financial conditions and disrupt stocks without any fundamental changes to the economic outlook.

But considering the strength of the economy, many doubt rate cuts will be as aggressive as investors hoped just a few weeks ago, threatening one of the rally’s biggest pillars of support.

“You’d think the wheels would have to come off to see that number of cuts,” said Fincher.

When David Witting prepared digital-marketing agency Dept@’s Boston-area offices for employees’ return in 2022, he ordered trendy couches, chairs and high tables, envisioning lively collaboration and banter.

Yet when his co-workers arrived, many skipped the furniture and gravitated toward the private booths scattered in the office. Since then he’s jettisoned some of the furniture, and added more booths.

“People are coming in to do occasional big meetings, but really the rest of the time, they want a quiet private spot to get on a Zoom call,” said Witting, a partner at the company. “It’s weird.”

As Covid-19’s remote-work surge fades, some workplaces are quieter and odder than ever. Employees have returned only to park themselves in deserted conference rooms or sound-muffling chambers. Colleagues grumble about booth-hogging co-workers, and some companies have started enforcing time limits on them.

The pods, some resembling old-school telephone booths, have emerged as one of the hottest segments in the $24 billion North American office-furniture industry. Manufacturers such as Room, Nook and Framery say business has been brisk. But some workers and managers say more booths means less eavesdropping, less gossiping, less camaraderie and less fun.

“It’s strange,” said William Blaze, a technology recruiter and consultant, referring to colleagues who end up occupying booths for much of their workdays. Blaze, who lives in Atlantic Highlands, N.J., observed the phenomenon while working at tech companies from 2021 to 2023, as well as at a client’s Manhattan co-working office where he now works two days a week.

“It seems that the goal of returning to office has been to create a rowdy buzz,” said Blaze. “We’re not seeing that.”

Janet Pogue McLaurin, global director of workplace research at architecture and design firm Gensler, said workplace privacy has never been more important. Many of the firm’s clients, which include big companies such as Amazon, have more than doubled their booths and other private or semi-private areas since the pandemic.

“This is a huge trend,” she said.

Demand for privacy has office architects and landlords scrambling to rearrange layouts. Open-plan offices, often dreaded by employees, are now being peppered with pods and booths that scream “do not disturb.”

Jamie Hodari, chief executive of global co-working company Industrious, said some workers are monopolising private areas in office spaces that were designed for professionals to connect with other professionals. “We see a lot more people linger for two hours post-phone call or a Zoom call because they like having a little space to themselves.”

Booth-inclined office workers say their needs have changed post-Covid, and they have a harder time concentrating among noise and distractions.

At CrowdComms, a U.K.-based maker of event technology, managing director Matthew Allen got used to working in near-silence at the office during the pandemic. When colleagues returned, their phone calls—even at normal volume—annoyed him so much he bought a sound-dampening booth.

Though it was ostensibly for the entire office, he soon moved in.

“It’s quite selfish,” said Allen, who has added a trio of plants. “I think it has very much become my home.”

On social-media sites such as X, Reddit and TikTok, employees generally celebrate the booths. Even Chatty Cathys are seeking them out. One X user tweeted that she locks herself in an office phone booth most days because she talks too much.

Others vent about booths’ poor ventilation and small size, or their aesthetics. Kirsten Auclair, a biomedical researcher in San Francisco, shudders at the harsh lighting in the booths she uses to take Zoom calls at work.

“It casts like the worst shadows, you look just kind of, like, on the brink of death,” she said. Still, Auclair considers the oasis from colleagues’ noise an office lifesaver.

Booth manufacturers insist their products can coexist with collegiality. SnapCab founder and CEO Glenn Bostock said the glass walls of his company’s pods allow for a sense of connection with co-workers.

“They can see you,” he said. “You can wave at them. You can still interact with people visually but you get that audio privacy.”

Other products seek a different balance between isolation and community. Furniture maker Steelcase offers a desk-encircling tent meant to ensure “territorial privacy” instead of silence. Nook, headquartered in the U.K., makes hut-shaped hideaways intended to provide a sense of psychological safety without being completely enclosed.

Nook founder David O’Coimin said an office filled with phone booths “is like you have a jail instead of having a workplace.”

Furniture distributor Thinkspace sells booths that Sid Meadows, principal and vice president, said are designed to allow a low level of outside sound. Humans are wired to crave some background noise, he said, pointing to popular YouTube videos of ambient office chatter.

That matches the findings of a study co-authored by Dr. Esther Sternberg, director of the University of Arizona Institute on Place, Wellbeing and Performance. She and colleagues discovered people became stressed when their surroundings were too quiet as well as too loud. The typical volume of birdsong, at 45 decibels, appears to be just right.

Nick Fine, a user-experience researcher in London, describes himself as an “old school, pre pandemic office worker” who enjoys the hubbub of a busy workplace. But the now-hybrid worker still spends considerable time in an enclosed pod to work without overhearing his colleagues’ chatter on days he’s in the office.

“I have ADHD and working in a pod engages my hyper focus,” he said, adding he likes having the booth option when the din is too much.

Farmer’s Fridge, which sells fresh salads out of vending machines, has eight pods made by Zenbooth and a plethora of conference rooms in its Chicago office. It offers about 40 hideaways for the 85 people who work there, yet that bounty of isolation isn’t always enough, even for the CEO.

“I actually live three minutes from here,” said Luke Saunders, also the company’s founder. “If I really have to get work done, I do it at home.”

HONG KONG—China’s economic growth rate finished at one of the lowest levels in decades last year, underscoring the heavy toll that a property-sector collapse and weak consumer confidence have taken on the world’s second-largest economy despite the lifting of all Covid-19 restrictions.

Gross domestic product in China expanded 5.2% in the fourth quarter and for the full year in 2023, according to data released by the National Bureau of Statistics on Wednesday. The reading confirmed a number uttered by Premier Li Qiang a day earlier at the World Economic Forum in Davos, Switzerland—an unusual disclosure of a high-profile data point by a senior leader before its formal release.

Apart from the three years that China was closed to the outside world during the pandemic, the country’s economy expanded in 2023 at the slowest annual rate since 1990, the year after the political turmoil of the student movement that was crushed around Beijing’s Tiananmen Square in June 1989.

In 2022, China’s economy grew 3%, while 2020—the initial year of Covid-19—saw growth of just 2.2%. This year’s outcome was flattered in part by comparison with the relatively low base of 2022, when harsh pandemic lockdowns swept the nation, crimping growth.

Last year’s 5.2% growth rate managed to top the government’s official target of around 5% growth, following a year of volatility and shifting expectations.

Maintaining growth at a similar pace this year may prove harder, given policymakers’ hesitance so far to launch any big-ticket stimulus packages. Forecasts for China’s growth rate this year among several global investment banks range from 4% to 4.9%. China is expected to announce any formal growth target at an annual legislative session set to take place in March.

In the near term, China has few obvious growth drivers. Export demand is softening as the global economy is projected to slow this year. Chinese families, hit by years of pandemic restrictions and receiving no direct financial support from the government, have turned cautious on spending amid a weak job market. Private businesses have been holding off on new investments while foreign investors are pulling funds out of the country.

The Chinese leadership’s determination to cultivate new engines of growth, in fields such as electric vehicles and renewable energy, is bearing fruit. Still, in the near term, it won’t likely be enough to make up for the shortfalls in job creation and overall growth rate from the rapid decline in its once-mighty real-estate sector.

In the longer run, China faces a daunting list of headwinds, including a population that is rapidly skewing older, high debt levels and a worsening external political environment that has seen relations with the U.S.-led West plummet.

Wednesday’s data release offered fresh signs of the dire state of the country’s demographics. Official statisticians said China’s population shrank by 2.08 million people last year, falling to 1.410 billion, after declining in 2022 for the first time in decades.

Economists are concerned that China may be falling into a vicious cycle in which falling prices and weak demand reinforce one another, as they did in Japan in the 1990s. Chinese policymakers’ reluctance to stimulate more forcefully has confounded many economists, though others have pointed to leader Xi Jinping’s ideologically-rooted reluctance to shower the economy with government money.

Instead, Chinese authorities have unleashed a barrage of smaller-bore measures, such as trimming key interest rates, cutting mortgage costs for home buyers and prodding banks to lend more to distressed property developers. Collectively, though, those measures have done little to reverse downward pressure on the economy. The government said in the fall that it would issue $137 billion in government debt, the biggest stimulus measure it has undertaken so far—though still not enough to reverse the downward momentum, economists say.

“I wonder if they are not realising how big the risk is if deflation pressure becomes entrenched,” says Alicia García-Herrero, chief Asia economist at investment bank Natixis.

Chinese stocks fell after the data was released. The CSI 300 index was down 1.4%, putting it on course to close at its lowest level in almost five years. Hong Kong’s Hang Seng Index, which includes the shares of many Chinese companies, was around 3.7% lower.

The country’s stock market is now in a multi-year slump, with foreign portfolio managers fleeing and individual investors in the country switching to safer assets. The poor state of the economy is a constant concern.

The past year had started off with a sense of buoyant optimism, as the abandonment of three years of stifling Covid-related restrictions spurred a revival of spending by consumers.

But the reopening momentum quickly lost steam after the first quarter, as global demand for Chinese-made exports—a key pillar of China’s economy throughout the pandemic years—began to wane. Persistent high youth unemployment and weak wage growth further weighed on average households’ fragile confidence.

In the fall, factory activity weakened again and consumer prices dropped into deflationary territory.

Throughout it all, a yearslong decline in Chinese home prices showed no sign of abating, further depriving revenue for debt-laden developers and eroding homeowners’ wealth and sense of financial security.

Looking ahead, economists have called on leaders in Beijing to step in forcefully to stabilize home prices and contain the risk of widening defaults among property developers.

“The key thing to watch in 2024 is if and when the central government would step in and take the main responsibility to stop the contagion,” said Larry Hu, chief China economist at Macquarie Group.

Whether Beijing can revive consumer confidence will be another key metric to watch this year.

In the central Chinese city of Wuhan, Bella Liu, a 32-year-old employee of a telecommunications firm, remembered 2023 as a year marked by plunging profits and frequent layoffs in her industry. After suffering a nearly 20% loss from her mutual fund investments, she is now parking more of her money in time deposits at her bank.

“In an era of slowing economic growth, I just feel lucky that I have a job,” Liu said.

Full-year economic data released by China on Wednesday showed retail sales, a key gauge of consumer spending, gained 7.4% in December and rose 7.2% for the full year compared with the respective year-earlier periods. Retail sales had fallen 0.2% for the full year in 2022.

The new data suggest that the economy is again beginning to rely more on domestic demand after counting on exports as the main pillar of growth during the pandemic years. Consumption was the largest contributor to overall growth in 2023. Still, it is unclear how much of a role it will play in driving the Chinese economy this year, in part because the release of pent-up pandemic demand has largely run its course, according to economists from Nomura.

Investment was also lackluster in 2023. Fixed-asset investment growth slowed last year, rising 3.0% for the full year compared with a 5.1% expansion in 2022. Private-sector investment, too, remained weak, falling 0.4% in 2023 compared with a year earlier as policy uncertainty spooked entrepreneurs. Private-sector investment had risen 0.9% in 2022.

Over the course of 2023, Beijing rolled out measures aimed at reining in the technology sector, including the video game industry, while warning about foreign espionage and detaining employees of foreign firms operating in China.

Readings of the property sector offered more reason for caution. New home prices in China’s 70 major cities dropped at a faster clip toward the end of 2023.

Average new home prices in December fell 0.45% from November, and 0.89% when from a year earlier, according to calculations by The Wall Street Journal based on data released by the statistics bureau. The pace of both declines was worse than in November.

For the full year, property investment fell 9.6%, while new construction starts dropped 20.4% and home sales by value declined 6.0%.

The surveyed urban unemployment edged up to 5.1% in December, from 5% in November. Economists have cast doubt on the accuracy of official statistics on joblessness in large part because the survey leaves out the country’s nearly 300 million migrant workers.

In a surprise move, China released a revised youth unemployment figure for the first time since July, when it abruptly suspended the publication of the data series amid a run of fresh record-high readings up to 21.3%.

On Wednesday, China’s statistics bureau said that it would publish a new urban youth unemployment figure each month for people age 16 to 24 that excludes students. The reading was 14.9% in December.

The statistics bureau said that the new methodology offers a more refined and comprehensive picture that would “better reflect the employment situation” by only including graduates who were looking for work.

Still, the economy had pockets of strength, especially in dominating the global supply chain for renewable energy products such as solar panels and electric vehicles. Growth in industrial production rebounded to 4.6%, accelerating from a 3.6% increase the year before, Wednesday’s data show.

—Grace Zhu and Xiao Xiao in Beijing contributed to this article.