Prior Week Summary
Despite dovish sentiment from the Federal Reserve, U.S. equities moved lower last week as global growth fears intensified amid weak manufacturing data from Germany and the U.S. The FOMC held interest rates steady at the conclusion of their two-day policy meeting and indicated that rate hikes are on hold for the rest of the year as the central bank shifted forecasts for future rate hikes and economic growth lower. Speaking at the press conference following the FOMC’s decision, Federal Reserve Chairman Jerome Powell said, “We don’t see data coming in that suggest that we should move in either direction. They suggest that we should remain patient and let the situation clarify itself over time.” As we head to print, market participants are pricing in a rate cut at the December FOMC policy meeting.
European Union leaders voted to give the United Kingdom an unconditional, two-week extension to their departure from the E.U., averting a “no-deal” Brexit scenario at the end of this month. U.K. lawmakers are expected to vote early this week on Prime Minister May’s newest proposal with a Brexit deadline now scheduled for April 12th. Separately, Robert Mueller’s investigation into Russian interference in the 2016 presidential election concluded that “The investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”
The Look Forward
Market participants are looking forward to updated figures on housing starts, new home sales and consumer spending among others. The U.S. and China are scheduled to resume trade talks in Beijing this week.
Market Implied Policy Path (Overnight Indexed Swap Rates)
Fixed Income Snapshot
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