John Hancock: Weekly Market Recap Week Ended March 20

Fed on hold

The U.S. Federal Reserve kept its key interest rate unchanged for the second meeting in a row, in line with market expectations. Policymakers maintained their forecast for one additional rate cut this year, and Chair Jerome Powell expressed concern that inflation remains elevated amid economic and geopolitical uncertainty.

Yields surge

Prices of U.S. government bonds fell for the third week in a row, lifting the yield of the 10-year U.S. Treasury to Friday’s close of 4.39%—the highest level in about eight months. The yield of the 2-year note climbed more sharply to 3.90% amid concerns about inflation and the prospect of fewer rate cuts ahead.

Holding steady

The U.S. Federal Reserve had plenty of company around the globe in keeping its key benchmark interest rate unchanged amid concerns about inflationary pressures. On Thursday, central banks in Japan, England, Sweden, and Switzerland also kept their key rates intact.

Q1 earnings preview

Less than a month before companies begin reporting first-quarter results, analysts are expecting that companies in the S&P 500 will report double-digit earnings growth for the sixth consecutive quarter. As of Thursday, analysts surveyed by FactSet forecast the index’s year-over-year growth rate in the first quarter would be around 12.5%.

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