The real Inflation Reduction Act is a gridlocked government.” – Michael A. Gayed
Last week's market recap:
- The S&P 500 closed the week down – 3.31%. Year-to-date the index is down -19.83%.
- Large-Cap Value leads performance YTD at -9.97%
- NASDAQ closed the week down -5.62% and is down -32.60% YTD.
- Barclays Aggregate Bond index is down -16.02% YTD
- 10-Year Treasury Rate decreased, ending the week at 4.17% from 4.02% the prior week.
- Fed Funds Target rate is 4.00%
- The 1-Year Treasury is yielding 4.79%
- A 6 Month Treasury is yielding 4.61%
- What is your savings account rate?
The week ahead:
- Mid-term elections
- CPI Data (Consumer Price Index) Inflation
Last week, as expected, the Fed raised the fed funds rate by .75%. Going forward, the Fed may move at a slower pace of rate hikes, but don’t expect a pause in December. Jerome Powell took a notably hawkish tone and rates may peak at a higher level than expected.
Jobs numbers were strong last week. Strength in the labor market deters the Fed from reversing course.
Overall, we are probably closer to the end of this Fed rate-hiking cycle vs the beginning. The expected terminal rate is now roughly 5.25%. Historically, the 12 months following a peak in the Fed Funds rate has been positive for stocks.
As always, let us know if you have any questions.
CRA Investment Committee
Matt Reynolds CPA, CFP®
Tom Reynolds, CPA
Robert T. Martin, CFA, CFP®
Gordon Shearer Jr., CFP®
Jeff Hilliard, CFP®, CRPC®
Joe McCaffrey, CFP®
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