Key Takeaways
The SVB Asset Management Economic Report is a quarterly review and outlook on economic and market factors that impact global markets and business health.
01 The FOMC continued to hold the fed funds rate steady in June.
The committee updated its fed funds forecast to one 25-basis point rate cut in 2024.
02 “Modest” progress has been made toward inflation.
While higher inflation trends are subsiding, levels remain above the Fed’s 2% target.
03 Consumer spending has moderately slowed but remains solid.
Uncertainty about the strength of the labor market as well as inflation influence consumers.
Unemployment Slightly Rises
The unemployment rate increased to 4.1% at the end of June, as labor market conditions become more balanced.
Inflationary Trends Have Subsided
Core PCE rose 2.6% YoY in June 2024, which is down from 4.2% in June 2023.
Bond and Equity Sector Performance is Mixed
Equities were led by a rally in tech stocks, while longer-term bonds experienced volatility and modest negative returns.
Market Sector Performance
Short-Term US Treasury Bonds and High Yield Bonds Outperform
Higher interest rates have led short term treasury bonds to outperform, while high yield bonds benefitted from tighter credit spreads.
