Optimists Rejoice a More Data-Dependent Fed
Equities surged on Wednesday as Chairman Powell spoke following another 75-basis-point increase in the federal funds rate. This helped bring equities into the green for the week.
This past week equities provided some relief to an otherwise abysmal year. Domestic equities advanced +4.1%, with large caps increasing +4.0% while small caps rose +5.4%. Outside the U.S., foreign equities increased +5.0% as developed markets rose +4.9% and emerging markets eked out an upward move of +1.5%.
Equities Lose Steam as CPI Surges
Equities have been losing steam following a sharp quarter-end rally. The S&P 500 finished the week down 1.1% and is now down almost 20% year-to-date.
First Quarter GDP report sees drop in PCE
This week brought a final recording of the first quarter’s GDP, sealing that number at -1.6%, the first negative quarter since 2020 and a sharp contrast to the expansionary monetary policy primed 5.7% of 2021.