- The Federal Reserve's current federal-funds target rate range is 0.25% to 0.50%
- The Bloomberg Global Aggregate Bond Index has posted a total return of -7.1% in 2022
- U.S. existing-home sales fell 7.2% in February compared to January
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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