John Hancock: Weekly Market Recap Week Ended March 15

Sticky inflation

A pair of reports showed that inflationary pressures remain stubborn, even as U.S. interest rates remain at their highest level since 2001. A report issued Tuesday on consumer prices and a Thursday update on producer prices both recorded price gains that were slightly higher than most economists had expected. The Consumer Price Index came in at an annual 3.2% rate in February, up from 3.1% the previous month.

Yield surge

Yields of U.S. government bonds rose as the latest inflation data produced a shift in the interest-rate outlook. After retreating the previous week to 4.08%, the yield of the 10-year U.S. Treasury bond rebounded to close at 4.31% on Friday.

Retail moderation

February’s 0.6% gain in U.S. retail sales was slightly below the consensus estimate of economists; however, the result marked an improvement from the 1.1% decline recorded in January. That updated January reading reflected an adjustment from an initial estimate of a 0.8% decline.

Fed ahead

The U.S. Federal Reserve is expected to keep its benchmark interest rate unchanged at its two-day meeting that concludes Wednesday, and Fed observers will watch for any clues about the timing of eventual rate cuts this year. Based on Fed funds futures trading, most investors expect the Fed’s pivot to rate-cutting mode is likely to begin in either June or July.

Source: https://wmr.jhinvestments.com/