This Weekly Financial Markets Update reviews the top market headlines: Fed Raises Rates Again, Sixth Straight Decline for Leading Indicators, Existing Home Sales Fall Again
  • Federal Reserve officials enacted the third straight 0.75 percentage point increase in the federal-funds rate
  • The Leading Economic Index declined 0.3% in August, the sixth straight monthly decline
  • Existing home sales in August fell 20% compared to the prior year

Top Three Market Headlines

Fed Raises Rates Again: As foreshadowed by Federal Reserve Chairman Jerome Powell in his late-August speech in Jackson Hole, the central bank last Wednesday hiked its interest rate benchmark, the federal-funds rate, by 0.75 percentage points to a range between 3.00% and 3.25%. This was the third straight three-quarter point increase and the fifth rate hike of 2022 altogether. The central bank also signaled that additional increases are likely as it tries to cool down inflation. New projections showed that a majority of Federal Reserve officials expect that the fed-funds rate will rise by at least another 1.25 percentage points over the Fed's final two meetings of 2022.

Sixth Straight Decline for Leading Indicators: The Conference Board announced last week that its Leading Economic index (LEI), a composite of ten U.S. economic indicators intended to signal turning points in the economy, decreased by 0.3% in August. This marked the sixth consecutive month the LEI has declined. Between February and August of this year, the index has fallen 2.7%, a reversal from the 1.7% growth over the prior six months. According to the Conference Board, the key factor driving the index's decline in August was the Federal Reserve's aggressive monetary policy to tame inflation.

Existing Home Sales Fall Again: The National Association of Realtors reported last week that sales of existing homes dropped 0.4% in August from the prior month to a seasonally-adjusted annual rate (SAAR) of 4.80 million. This was the seventh straight month of decreasing sales. On a year-over-year basis, the level of sales was 20% lower, as market activity has cooled in reaction to rising mortgage rates. The median price of existing homes that were sold increased by 7.7% from August of last year, which was the lowest annual price gain recorded so far this year.

As of September 26, 2022 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -4.96% -4.45% -23.74% -21.04%
S&P 500 -4.63% -2.06% -21.61% -15.71%
Russell 2000 -6.58% -1.38% -24.48% -24.70%
MSCI EAFE -5.60% -8.12% -26.10% -26.29%
MSCI Emerging Markets -4.03% -8.59% -24.70% -26.79%
FTSE NAREIT -6.50% -6.53% -25.41% -16.23%
Bloomberg Commodity -3.66% -3.38% 14.43% 15.53%
Barclays U.S. Aggregate -1.56% -3.80% -13.75% -14.24%

The Conference Board 9/22/2022, WSJ 9/21/22, National Assoc. of Realtors,9/21/2022. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Gallagher Fiduciary Advisors, LLC ("GFA") is an SEC Registered Investment Adviser that provides retirement, investment advisory, discretionary/named and independent fiduciary services. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of AJG or its affiliates or to independent contractors; such payments do not change our fee. Securities may be offered through Triad Advisors, LLC ("Triad"), member FINRA/SIPC. Triad is separately owned and other entities and/or marketing names, products or services referenced here are independent of Triad. Neither Triad, Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice.