The Week on Wall Street
Stocks dropped last week as investors focused on “what’s next” for interest rates after mixed comments from multiple Fed officials.
Fed Officials Weigh In
Stocks struggled out of the gate again last week, ending Monday and Tuesday in the red on concerns that recent economic data could derail the Fed’s plan for short-term rates.
The markets recovered Wednesday through Thursday morning when weekly jobless claims were better than expected. But stocks fell broadly Thursday afternoon following mixed comments from multiple Fed officials. All three averages ended the day down more than 1 percent for the first time in a month.1,2
On Friday, a strong jobs report gave investors much-needed confidence. The U.S. economy created 303,000 jobs in March—higher than economists’ expectations—while unemployment dropped slightly to 3.8 percent. Markets rallied after the news, but not enough to recoup all weekly losses.3
What’s the Scoop?
Several Fed officials made speeches last week, including Chair Jerome Powell. In a Wednesday speech at Stanford University, Powell said it was a “bumpy” path to a soft landing, but Fed officials are continuing to look at the long-term trends.4
Last week, Atlanta Fed President Raphael Bostic suggested one cut. San Francisco Fed President Mary Daly noted no guarantees, and Cleveland’s President Loretta Mester said rate cuts may come later this year. Minneapolis President Neel Kashkari rattled markets by suggesting that no cuts may be on the table, followed by Fed Governor Michelle Bowman, who said on Friday that it’s possible rates may have to move higher to control inflation.5,6
The flurry of comments comes following the end of the Fed’s blackout period. Fed officials are not allowed to make public comments except for very narrow windows during the year.
Weekly Riddle
You have 31 baseballs in a box, and 31 kids are lined up to get them. You give each kid a baseball, but in the end, one baseball remains in the box. How is this possible?
Last week’s riddle: They have not flesh, nor feathers, nor scales, nor bone. Yet they have fingers and thumbs of their own. What are they? Answer: Gloves.
John Dombroski Jr. may be reached at (480) 991-1055 or [email protected]
Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)
Posted on