Recap | Week Ahead | Rates — CRA Financial, LLC

“The time has come” for a cut in interest rates. “The direction is clear.” – Federal Reserve Chair Jerome Powell : Jackson Hole Speech 8/23/24

Last week's market recap

The S&P 500 closed the week up 1.47%. Year-to-date the index is up 19.20%
NASDAQ closed the week up 1.41%. YTD the index is up 19.66%
U.S. Aggregate Bond index was up .67%. YTD the index is up 3.60%
10-Year Treasury Rate decreased, ending the week at 3.81% down from 3.89% the prior week
- Fed Funds Target rate remains at 5.25-5.50%
The 1-Year Treasury is yielding 4.41%
A 6 Month Treasury is yielding 4.90%

The week ahead:

2Q GDP (second estimate)
July Inflation Data (PCE)
Earnings: Nvidia, Salesforce, Dell, CrowdStrike, and more

Fed Pivot:

The Fed has a dual mandate to promote maximum employment and stable prices.

Inflation is not at the Fed’s target but its headed in the right direction.
Maximum employment in not headed in the right direction, so the Fed is likely to start cutting rates in September to help the economy a little bit.

This is another quote from Jerome Powell’s speech last week…

“We will do everything we can to support a strong labor market as we make further progress toward price stability. With an appropriate dialing back of policy restraint, there is good reason to think that the economy will get back to 2% inflation while maintaining a strong labor market. The current level of our policy rate gives us ample room to respond to any risks we may face, including the risk of unwelcome further weakening in labor market conditions.”

Markets are pricing in on-going cuts. Stocks went up and investors rushed to lock in bond yields before the Fed starts cutting rates.

As always, let us know if you have any questions.

Best,

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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