Earlier this week, the Federal Reserve raised interest rates another 25 basis points bringing the front end of the short-term lending rate to 5%. However, the focus was on Fed Chair Powel’s statement. He softened his rhetoric around future lending rate hikes, indicating a pause may be warranted.
The Fed has repeatedly said they are committed to lowering inflation to its 2% target. Still, with the recent turmoil in select regional banks, the Federal Reserve may take a step back and pause before making further monetary policy decisions.
Overall the US Economy has shown to be resilient as March Job openings came in at 9.6 million, slightly below expectations but still, a historically robust figure, while the April unemployment is predicted to come in at a healthy 3.6%, showing the US labor market remains strong.
In other positive news, we are in the midst of Q1 earnings season; over half of S&P 500 companies have reported, and nearly 80% of companies have beaten Wall Street’s earnings estimates. Led by some of the mega caps in tech, MSFT, META, and AMZN reported strong earnings, defying concerns of weakening growth prospects, helping prop up the S&P 500 with a gain in April.
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