Institutional Investment & Fiduciary Services - August 4 - Weekly Market Update
Published on 08/04/2014
Last Wednesday, the Bureau of Economic Analysis released their advance estimate of Gross Domestic Product (GDP) for the second quarter. As many predicted, the economy rebounded strongly in the second quarter, growing at a 4.0% rate and the real personal consumption expenditure – the key rate used by the Fed to measure inflation - advanced at a rate of 2.5% for the quarter, above the Federal Reserve’s inflation target of 2%. Although the better-than-forecasted growth stoked fears that the Federal Reserve may consider increasing short-term rates ahead of schedule, the Fed’s statement later in the afternoon remained dovish. Markets initially reacted well before ending the week down – although the economic recovery continues to show strength, there are areas of weakness and markets seem to be unsure of how to process the economy’s mixed signals.