Markets were mixed as investors struggled with the idea of higher interest rates for longer.
Much of the attention last week was on the much anticipated speech by Fed Chairman Powell at the Jackson Hole Economic Symposium. His speech was largely as expected, hawkish with a hint of hope. While Powell reiterated that the Fed was prepared to raise rates further, they are also determined to “proceed carefully” moving forward. Powell’s speech did little to change market expectations. Fed Futures continue to show an 80% probability of a pause in rate hikes in September.
The Fed’s own economic data is positive and not yet indicative of a recession—hence their view that they could raise rates again if needed.
The Atlanta Fed recently updated their projection of 3rd quarter GDP to +5.9%. The Chicago Fed’s National Financial Conditions Index loosened again last week and more than 90% of the internal indicators of that index are looser than average. The St. Louis Fed's Financial Stress Index is at -0.67, which is a level that has not been associated with recessions, historically. The job market continues to be resilient. If the JOLTs number is expected to come in higher this week, which would mean consumers are unlikely to curb spending habits with the idea there are jobs a plenty.
The information contained herein is for informational purposes only and is developed from sources believed to be providing accurate information. The opinions expressed are those of the author, are for general information, and should not be considered a solicitation for the purchase or sale of any security. The decision to review or consider the purchase or sell of any security should not be undertaken without consideration of your personal financial information, investment objectives and risk tolerance with your financial professional.
Forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.
Any market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.
Past Performance does not guarantee future results.