The move lower in yields has also supported the strong equity-market performance this month, particularly in growth-oriented and longer-duration sectors. We have seen the two-year yield move lower by about 50 basis points and the 10-year yield by 75 since their mid-June highs. In our view, perhaps the biggest signal after the Fed meeting was the sizable move lower in Treasury bond yields, likely reflecting the market view that inflation and growth may be slowing, and the Fed may move more gradually going forward. … It doesn’t make sense that the economy would be in a recession with this kind of thing happening.” is currently in a recession and the reason is there are too many areas of the economy that are performing too well. economy is slowing, he does not believe it is currently in a recession: 'I do not think the U.S. In addition, Powell highlighted that while the U.S. While the Fed acknowledged some softening in commodity prices lately, it also noted that areas like energy prices are more volatile, driven in part by external factors like the crisis in Ukraine. And the key piece of data that it is tracking is inflation, both headline and core inflation. However, Chair Powell also was clear to emphasize that the path of the Fed would now be data dependent. This chart displays the market's expectation for future Federal Reserve, peaking at 3.5% in February of 2023 and gradually coming down after that. Markets expect a slower pace of rate increases ahead, followed by rate cuts in 2023 Markets, of course, cheered this notion of a more gradual Fed, with equity and bond markets closing sharply higher on Wednesday.įigure 1. (Markets currently anticipate a 50-basis-point hike in September, followed by two 25-basis-point hikes in November and December – see chart below)1. This would imply about 50-100 basis points more of tightening over the next three meetings this year, which means the pace of rate hikes could slow. Perhaps more importantly, Powell referenced a fed funds range of 3.0%-3.5% by the end of the year. Fed Chair Jerome Powell noted in his commentary that the fed funds rate is now close to the Fed's estimate of a neutral rate, indicating an official end of the post-pandemic easy money policy 1. The July Fed meeting confirmed that future rate hikes will be data-dependentĪs expected, the Federal Reserve raised rates this week by 75 basis points (0.75%), bringing the benchmark fed funds rate to about 2.5%. Had financial markets not been down substantially this year, there may have been more volatility this week, but with the S&P 500 Index down over 17% and the Nasdaq down close 24%, markets perhaps de-risked and set a lower bar ahead of the data 1.

economy is slowing, as evidenced by the GDP data, Fed commentary, and earnings results Ģ) The Federal Reserve may now start to hike rates at a more gradual pace andģ) Markets did a lot of work to the downside ahead of softening economic and earnings data. We would highlight three key takeaways from the week:ġ) The U.S. Overall, while data broadly seemed soft, market reaction was largely positive, perhaps reflecting results that were better than feared and markets that had priced in sluggish growth already. Last week markets faced a triple-whammy of data, including the July Federal Reserve rate decision, the second-quarter GDP (gross domestic product) reading, and the ongoing second-quarter earnings season, with a focus on large-cap technology.

You’ll be spoilt for choice in Ghent! Once you’ve tasted the good life, you’ll never look back.Big week for markets: Our take on the Fed, GDP and earnings On the same square, immerse yourself in history at the craft market on Saturdays and Sundays and discover Ghent’s crafts from days gone by.

Vegetable and craft market: Buy organic vegetables on Fridays from the Groentenmarkt.

Bric-a-brac at Bij Sint-Jacobs Antique and bric-a-brac hunters can be found at the flea market in Ghent on Friday, Saturday and Sunday mornings at Bij Sint-Jacobs.

Typical local market: On Friday mornings you will find delicious local delicacies at the Vrijdagmarkt.

Book market: On Sunday mornings, bookworms can browse the book market on the Ajuinlei to their heart’s delight.

Enough to make any Ghent visitor’s mouth water. Buy a plant or a bunch of flowers and then enjoy a long lunch or an aperitif.

Flower market: Have you got green fingers? Don’t miss the famously lovely flower market during your weekend trip to Ghent: it is held on Sunday mornings on the Kouter.

M.e.a.t. market days