Daily Market Color May 20, 2022Bear Market Fears Outweigh Fed Speak, Pull Rates Lower S&P 500 enters bear market territory as rates follow risk assets lower. The S&P 500 fell 2.3% on the day, pulling the S&P 500 for a moment in to bear market territory (20% below its recent high). The decline on the day pulled the index to its 7th straight weekly loss, the first time that’s happened in over 20 years. Rates also fell on the day, Treasury yields and swap rates declining across the curve, the 10-year Treasury yield falling below 2.80% to 2.78%. St. Louis Fed President Bullard says he’s targeting 3.5% policy rate by year end. Once again, the Fed’s Bullard is sounding off on higher rates. The St. Louis Fed President repeated his stated Fed Funds target of 3.5% by the end of the year, saying that the rate increases will be necessary to fight rising prices. Bullard also dismissed recent growth fears, and added that he doesn’t see a high probability of recession by year end.