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The global stock market had to digest some significant headlines last week with oil spiking, Fed speakers talking, and employers hiring. Oil topped $91 a barrel, Fed officials have said there is no need to consider lowering rates pre-emptively, and hiring came in so far above expectations that the unemployment rate dropped.
To quote Fed Chair Jay Powell, "The economy actually isn’t becoming tighter, which it ordinarily would. It’s actually becoming a little looser, and you’re seeing inflation come down—very unusual situation."
Because inflation reports in January and February were higher than expected, there will be a lot of focus on the March inflation report, arguably too much.
At PWM, we believe the higher-for-longer narrative is still intact. Therefore, we diversify between high-income bonds and stocks of cash-flow-rich companies that can maintain earnings growth in this environment.
Brisk Hiring Bolsters Fed’s Cautious Stance on Rate Cuts
by Justin Lahart
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