3 Market Update – Economy, Federal Reserve & Bond Market At its most recent meeting the Fed maintained the target federal funds rate at 3.5% to 3.75%, noting that job gains remain low while unemployment is little changed. Recognizing that its preferred measure of inflation, Core PCE, is elevated, the Committee affirmed its commitment to return this measure to the 2% target. Core Personal Consumption Expenditures Index – measures the prices paid by consumers for goods & services without the volatility caused by movements in food & energy prices to reveal underlying inflation trends.
Core PCE Index (yoy %)
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Federal Reserve: At its most recent meeting, the Fed recognized the economy “. . . has been expanding at a solid pace . . .” with job gains low and a stable unemployment rate. They noted consumer spending is “resilient” and business fixed investment “continues to expand at a brisk pace”. They also observed that housing market activity remains “weak”.
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