Broken Toes, Babies and … Bond “Bubbles”
Investor Insights, May 25th, 2018
Five Things You Should Know
- Equity Markets – were mixed this week with U.S. stocks (S&P 500) up 0.30% while international stocks (EAFE) were down -1.56%
- Fixed Income Markets – were positive this week with investment grade bonds (AGG) up 0.78% and high yield bonds (JNK) up 0.11%
- Fed Minutes Released – The FOMC released their minutes from their May 1st meeting with the committee stating they weren't raising rates in May but noting "a temporary period of inflation modestly above 2% would be consistent with the Committee's symmetric inflation objective." The group also remained constructive on the economic outlook and believe our economy should expect continued progress despite some weakness in the first quarter. The members did confirm that another rate hike in June was likely, but also seem to suggest that the Fed may not be as aggressive with their rate-hike path. Markets rallied on the news.
- U.S./North Korean Summit Called Off – after a regrettable analogy by U.S. NSA John Bolton, North Korea took things even further stating that they may “make the U.S. taste an appalling tragedy it has neither experienced nor even imagined.” That comment along, with other insults, lead President Trump to call off the summit. However, as of today both sides are suggesting the meeting may be salvaged and offering up some conciliatory language.
- Key Insight – A sincere thank you to all those, and their families, who gave their lives to protect our great nation and the wonderful opportunities it provides! We will certainly remember the sacrifice even more this weekend.
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