Daily Market Color January 31, 2022January Ends with Equity Rally and Curve Flattening Equities rally not enough to save the market from worst January since 2009. All three major equity indices closed higher on the day with tech stocks leading the charge. The Nasdaq closed up 3.41% on the day, but still ended January down -8.98%. Rates sold-off across the curve to end the month as the 2-year U.S. Treasury yield has increased an astounding 45 bps since the start of the new year. Another Fed index indicates moderating economic activity. The Dallas Fed Manufacturing index decreased in January to its lowest level since July 2020 to a reading of 2. A positive reading indicates growth. The production index within the monthly survey decreased to an 8-month low, while uncertainty around economic outlooks increased to its highest level since April 2020, the onset of the pandemic. Fed speakers talk rate hikes. Over the past 24 hours, we heard a few insights from current Fed Presidents Mary Daly, Esther George, and Raphael Bostic. Bostic was the most hawkish commenting to the Financial Times that he would support a 50 bps increase in March to the Fed’s benchmark rate if the data supported such a move. George put her support behind supporting rolling down the Fed’s balance sheet during its tightening cycle for a “…shallower path for the policy rate.” Daly, one of the more dovish Fed members, commented that the Fed, “…is not behind the curve,” on inflation and supports a gradual increase to rate hikes.