A seesaw week for U.S. stocks ended on the upside last week, though the rally was more a function of slow growth rather than a booming economy. We are seeing this dynamic more and more: when bad news is good news, and vice versa, which plays a part in keeping the markets volatile. Read more about my thoughts on this in my weekly commentary.

The irony is not lost on us.

With the notable exception of the labor market, U.S. economic data are generally running below expectations, to the point where an index of economic surprises (Bloomberg ECO U.S. Surprise Index) is now at its lowest level since 2009. But instead of selling, investors are taking solace in the fact that low inflation and the moderating economic growth may lead the Federal Reserve (Fed) to increase interest rates at a slower, gentler pace.

Take last week’s Fed statement. While the central bank removed the word “patient” and set the stage for a normalization in interest rates later this year, its recognition of the recent economic softness was interpreted as a dovish stance. Treasuries rallied on the announcement, with the yield on the 10-year Treasury dipping back below 2%, as equities swung from a loss to a 1% gain.

The only loser last week was the U.S. dollar. However, the dollar has been rapidly rising so far this year, putting many export-dependent companies in a difficult situation and forcing analysts to lower their forecasts of companies’ earnings.

We are steady on this bumpy ride.

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