1Q 2024 Commentary: The Fed’s Aim: A New Bull’s Eye

Summary

• Equity markets concluded the first three months of 2024 on a strong note as the S&P 500 achieved new all-time highs. The small cap Russell 2000 ended March at its highest level since January 2022.
• With inflation remaining persistently above its stated 2% target, the Fed’s position may be shifting, and it seems more willing to tolerate these higher levels.
• Ongoing unchecked fiscal spending is driving up the federal deficit and interest costs.
• If inflation stays higher and long-term bond yields remain under control, higher equity valuations may be sustained, but persistently high interest rates may continue to challenge the interest-rate-sensitive areas of the market.

Read and download the commentary here.