Daily Market Color

Risk-On to Start the Week

Risk assets and rates rebound. The S&P 500 and Nasdaq Composite started the week on a high note after chalking up a 7th straight weekly loss. The S&P 500 climbed nearly 2% while the Nasdaq posted a solid 1.6% gain. Rates got in on the risk-on mood, bouncing back after several days of declines. The benchmark would ultimately climb 6bps to 2.86%. 

Bostic floats idea of “rate pause” after another 100bps of hikes. The next four fed rate hikes have been fully baked in for some time, with the Fed Funds target rate expected to hit 2% by the end of the summer. In public comments today the Fed’s Raphael Bostic became the first Fed official to float the idea of a pause after the next two FOMC meetings, suggesting the central bank should take stock before continuing to hike interest rates. Other Fed officials have been equally vocal about the need to aggressively hike rates, leaving a wide range of potential policy rates by year end.

Day ahead. April new home sales and May PMI data will be released tomorrow. Fed Chair Jerome Powell is scheduled to speak tomorrow afternoon.

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