This Weekly Market Update reviews the top market headlines: Fed Chairman Strikes a Hawkish Tone on Rate Rises, Global Bonds Suffer Worst Drawdown on Record, U.S. Home Sales Fall Amid Tight Supply and Rising Rates

Top Three Market Headlines

Fed Chairman Strikes a Hawkish Tone on Rate Rises: Federal Reserve Chairman Jerome Powell said last week the central bank may move to raise interest rates in half-percentage-point increments should the bank's officials feel it necessary to thwart inflation pressures. The Chairman's comments came just a few days after the Fed announced a quarter-point increase in the federals-funds rate target range to 0.25% to 0.50%, signaling the end of the bank's post-pandemic zero-rate policy. Certain other regional Federal Reserve Bank presidents subsequently echoed the Chairman's comments during the week, signaling that the Fed may act more aggressively to fight inflation in 2022.

Global Bonds Suffer Worst Drawdown on Record: With interest rates on the rise around the globe, broad bond market indices are recording growing losses from corresponding price declines (bond prices move in the opposite direction of interest rates). The Bloomberg Global Aggregate Bond Index, a broad benchmark for global government and corporate bonds, has posted a total return of -7.1% year-to-date in 2022, and in total has declined 11.6% from a high in January of 2021 through the end of last week, its steepest decline on record. Over that time period, the index has lost about $2.6 trillion in market value, surpassing 2008's loss of around $2 trillion.

U.S. Home Sales Fall Amid Tight Supply and Rising Rates: Home sales in the United States declined in February as the lack of housing inventory and rising mortgage rates have put pressure on potential home buyers. According to data from the National Association of Realtors (NAR), existing home-sales fell 7.2% in February compared to the previous month. The NAR also reported that the median existing-home sales price rose to $357,300, up 15% from a year prior. Additionally, new-home sales declined over the month, falling 2% from January, according to the U.S. Census Bureau.

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As of March 28, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.19% -5.69% -5.69% 8.51%
S&P 500 1.81% -4.35% -4.35% 17.85%
Russell 2000 -0.38% -7.22% -7.22% -3.81%
MSCI EAFE 0.19% -7.09% -7.09% 0.76%
MSCI Emerging Markets 0.22% -8.39% -8.39% -10.78%
FTSE NAREIT 0.60% -5.64% -5.64% 24.58%
Bloomberg Commodity 5.27% 31.02% 31.02% 56.61%
Barclays U.S. Aggregate -1.82% -6.89% -6.89% -5.36%

Bloomberg 3/25/2022, Bloomberg 3/22/2022, NAR 3/18/2022, Census.gov 3/23/2022, WSJ 3/21/2022. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory, named and independent fiduciary services are offered through Gallagher Fiduciary Advisors, LLC, an SEC Registered Investment Adviser. Gallagher Fiduciary Advisors, LLC does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. Gallagher Fiduciary Advisors, LLC is a single-member, limited-liability company, with Gallagher Benefit Services, Inc. as its single member. Neither Arthur J. Gallagher & Co., Gallagher Fiduciary Advisors, LLC nor their affiliates provide accounting, legal or tax advice. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your Gallagher Fiduciary Advisors consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.