John Hancock: Weekly Market Recap Week Ended September 22nd

Higher for longer

Although the Fed kept its benchmark interest rate unchanged—as expected—it signaled that it’s likely to keep that rate high further into 2024 than it had previously forecast. Projections released at the end of the Fed’s meeting showed that 12 of 19 officials favor raising rates one more time this year.

Surging yields

Yields of U.S. government bonds retreated somewhat on Friday after spiking on Thursday to the highest levels in more than a decade. The 2-year U.S. Treasury bond yield climbed as high as 5.20% in intraday trading, the 10-year yield hit 4.49%, and the 30-year yield jumped to 4.59%

Yen versus dollar

The value of Japan’s yen has sharply weakened relative to the U.S. dollar this year as Japan sticks by its accommodative monetary policies and the United States maintains higher interest rates. As of Friday, the yen had fallen about 12% year to date as the gap between Japanese and U.S. rates widened to the highest level in 22 years.

Price check ahead

A report scheduled to be released on Friday will show whether a recent interruption in inflation’s longer-term decline extended into August, as measured by the U.S. Federal Reserve’s preferred gauge for tracking prices. The most recent report showed that the Personal Consumption Expenditures Price Index rose at a 3.3% annual rate in July, up from 3.0% in June—a reversal of the downward trend in the prior months.

Source: https://www.jhinvestments.com/weekly-market-recap