This Weekly Financial Markets Update reviews the top market headlines: Federal Reserve Remains on Hold, Lower Gas Prices Dampen Inflation Rate, Retail Sales Rebound in November

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Top Three Market Headlines

Federal Reserve Remains on Hold: The Federal Reserve's policy-setting committee voted last week to maintain the federal-funds interest rate target range at 5.25% to 5.50%. This was the third straight meeting at which the Fed held the target steady after having raised it to this level in July. Concurrently, the central bank released committee members' updated projections for the future path of rates — the so-called "dot plot." According to this, policymakers now anticipate no further rate hikes and see the fed-funds rate target range declining by three-quarters of a percentage point to 4.50% to 4.75% during 2024, a faster pace than previously projected in September.

Lower Gas Prices Dampen Inflation Rate: The U.S. Department of Labor reported last week that the Consumer Price Index (CPI) increased in November by 0.1% and 3.1% over the prior month and year, respectively. A key factor weighing on the index was a decline in gasoline prices, which helped offset higher costs for housing and insurance. The "core" CPI, which excludes the volatile food and energy categories, increased by 0.3% on the month and 4.0% versus the prior year. The latter figure, equal to October's pace, has fallen from a level of 6.6% in September 2022, but remains above the Federal Reserve's stated 2% target.

Retail Sales Rebound in November: Sales at U.S. retail and food service establishments rebounded in November, rising 0.3% on the month after having fallen by 0.2% in October. Solid consumer spending was reported for restaurants, furniture stores, and internet retailers. The overall sales rate was depressed by decreased sales at gasoline stations due to lower gas prices; excluding gasoline stations, in fact, sales growth across all other types of establishments was 0.6%.

Please note: There will be no Weekly Financial Market Update published next Monday, December 25. The next report will be published on January 2, 2024. We would like to wish everyone a happy holiday season!

As of December 18, 2023 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 2.62% 9.36% 20.36% 18.99%
S&P 500 2.53% 10.45% 24.89%% 23.16%
Russell 2000 5.60% 11.59% 14.42% 13.66%
MSCI EAFE 2.56% 8.24% 15.90% 14.91%
MSCI Emerging Markets 2.69% 5.32% 7.23% 6.97%
FTSE NAREIT 0.26% 15.38% 12.91% 9.24%
Bloomberg Commodity 1.16% -4.58% -7.87% -8.50%
Barclays U.S. Aggregate 2.16% 6.16% 4.48% 2.41%