Keel Point Insights

Check out our guides, tools and research for expert help on all your
life planning, wealth planning, and familiy management questions!

& Videos

Awards &
Press Releases


Keel Point
in the News

Market Recap – May 8, 2023

Keel Point
May 8, 2023
Market Recap

As expected, the Fed raised the Fed funds rate by ¼% to a 5.00% to 5.25% target range this past week and signaled that this rate hike is likely to be its last – unless….

  • Its announcement dropped previous language that “some additional policy firming may be appropriate” and indicated that it is pausing to examine the cumulative impact of its tightening on inflation, the economy and financial developments, which occur with a lag over time.
  • Chair Powell at his press conference, however, stated that “we are prepared to do more if greater monetary policy restraint is warranted,” which makes the CPI inflation report on Wednesday more important to how financial markets interpret what the Fed does next.
  • With First Republic Bank having failed just four days earlier, Chair Powell’s statement that conditions in the banking sector “have broadly improved since early March” was surprising. He went on to hint that the Fed’s latest Senior Loan Officer survey, due for release today, will confirm that the severe, continuing tightening in credit conditions has worsened.
  • We are already seeing how tighter credit conditions are driving a faster slowdown in economic activity than the Fed’s economic projections anticipated. With jobs growth cooling (see below) as well, we should see a faster decline in core inflation.  With this, interest rates likely will decline as well beginning in the fourth quarter.

Last Friday’s report on April non-farm employment gains of 253,000 and a decline in the unemployment rate to 3.4% from 3.5% suggest a more robust U.S. jobs market than is the case, after considering downward revisions in March and February jobs growth. 

  • March jobs gains were revised down from 236,000 to 165,000, and February was revised down from 326,000 to 248,000, resulting in a three-month average gain of 222,000 which is the weakest since January 2021.
  • The 3-month/3-month annualized growth in wages declined to 3.8%. As job vacancies continue to fall, there will be additional downward pressure on wage growth.

Q-1 earnings continue to come in better than expected and forward estimates are rising.

Disclosure: Securities offered through Keel Point Capital, LLC, Member FINRA and SPIC. Brokerage and Investment Advisory Services are offered under the Keel Point brand. Investment Advisory Services offered by Keel Point, LLC, an affiliate of Keel Point Capital, LLC. While reasonable efforts have been made to provide data from sources considered to be reliable, no guarantee of accuracy is given. Keel Point does not give tax, accounting, regulatory, or legal advice to its clients.

Related News & Articles

Market Recap – June 5, 2023

It is sometimes difficult to know what news has the biggest impact on financial markets, but last week the S&P 500 rallied 2.8% from its low point on Wednesday on news of a debt ceiling bill passing a crucial house rules committee vote, comments by the newly...

read more

Market Recap – May 30, 2023

The biggest news affecting financial markets this week is the tentative agreement to  suspend the debt ceiling until January 1, 2025, along with certain limits on spending.  Although legislative wrangling likely will continue through the week, it should be finalized...

read more

Market Recap – May 22, 2023

Positive economic news and a belief that the U.S. will avoid a default on its debt service, as well as program and operating obligations, contributed to positive stock market gains this  past week and even led some Fed officials to indicate that more interest rate...

read more