John Hancock: Weekly Market Recap Week Ended March 24th

Fed raises again

The U.S. Federal Reserve on Wednesday lifted interest rates by a quarter percentage point, extending its run of rate hiking amid continuing instability in segments of the banking sector. Fed officials also revised their GDP growth forecast downward. Each of the major U.S. indexes fell 1.6% for the day.

Yield shake-up

Yields of U.S. government bonds fell for the third week in a row, extending a recent run of fixed-income volatility amid shifting interest-rate expectations. The yield of the 10-year Treasury bond slipped to 3.38% on Friday, down from a recent peak of 4.07% on March 2. The 2-year note’s yield was around 3.77%, down from 5.07% on March 8.

Concurrent rate hikes

As in the United States, central banks in the United Kingdom, Switzerland, and Norway all lifted interest rates in the latest week. The U.K. hike came after data released on Wednesday showed that inflation rose unexpectedly to a 10.4% annual rate in February, prompting the Bank of England to lift its key rate by a quarter of a percentage point.

Price check ahead

A report scheduled to be released on Friday will show whether a recent uptick in U.S. inflation extended into February, as measured by the U.S. Federal Reserve’s preferred gauge for tracking prices. The most recent report showed that the Personal Consumption Expenditures Price Index rose 0.6% in January, marking the largest month-to-month increase since last June.

Source: https://wmr.jhinvestments.com/