Stocks bounced back, with the S&P 500 gaining 4.06% and the Tech Heavy NASDAQ gaining 5.98% for the week. Bonds also added value as rates decreased in anticipation of a Fed cut. The aggregate bond index (AGG) gained 5.68% for the year through Friday. Bonds are on pace for their first positive calendar year of returns since 2020.
This week’s focus is on the Fed, as a 0.50% rate cut seems appropriate. The probability of the FOMC cutting the Federal Funds Rate by 0.50% at their meeting this Wednesday is 65%. Their quarterly Summary of Economic Projections will include updated estimates for future rate cuts, which could show an increase in the pace and size of cuts compared to their June projections.
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Regards,
David Bennett