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Recap | Week Ahead | Growth and Rate Cuts Thumbnail

Recap | Week Ahead | Growth and Rate Cuts

"The economy is strong, the labor market is strong, and inflation has come way down.” – Fed Chair Jerome Powell on 3/20/24

Last week's market recap: 

  • The S&P 500 closed the week up 2.31%.  Year-to-date the index is up 10.12%
  • NASDAQ closed the week up 2.86%.  YTD the index is up 9.63%
  • U.S. Aggregate Bond index was up 73%.  YTD the index is down -1.00%
  • 10-Year Treasury Rate decreased, ending the week at 4.22% down from 4.31% the prior week
    • Fed Funds Target rate remains at 5.25-5.50%
  • The 1-Year Treasury is yielding 4.99%  
  • A 6 Month Treasury is yielding 5.31%  
    • Short term rates are trending lower.  Reinvestment Risk for short term debt remains elevated.

The week ahead:  

  • 4Q 2023 real GDP (final estimates)
  • PCE (The Fed’s preferred measure of inflation)
  • Consumer Sentiment 
  • Housing Data

Dovish Fed:

Last week the Fed delivered a dovish message, stocks and bonds rallied.  Small cap stocks and sectors such as industrials and financials, were among the top performers. 

Economic Growth with Potential Rate Cuts:

The Fed’s GDP forecast has been adjusted higher.  The Fed’s forecast for interest rates has been adjusted lower.  The Fed’s Dot Plot is showing the Fed Funds Rate in the 2.5%-3.0% range in the next 3-5 years.  

Broadening stock market leadership should be viewed as a healthy market. Markets rarely go up in a straight line.  Short term volatility may present opportunities to diversify. Momentum as a factor has been working, but for most investors the focus should remain on Quality.  Reinvestment risk of short term debt seems to be increasingly elevated. Within fixed income, many investors may want to look for opportunities to extend duration. 

Fed’s Dot Plot:

Source: Bloomberg LP

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® 

Phillip Tompkins, CFP®

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