Desla's Weekly Market Update: December 24, 2024

Desla's Weekly Market Update: December 24, 2024

 

The Impact of The Federal Reserve and Their Monetary Policies on U.S. Markets

 

Economic Data

 

Federal Reserve Rate Cut 

Last week, the Federal Reserve reduced interest rates by twenty-five basis points down to a range of 4.25%-4.5%. This reduction likely cues a more cautious approach for 2025 as there are only two potential rate cuts, down from the previously anticipated four.  

 

Treasury Yields Increase 

U.S. Treasury Yields rose, with the ten-year yield climbing to approximately 4.53%. The Federal Reserve’s reduced rate cuts for 2025 coupled with strong economic growth data drove the yield increase. 

 

Economic Growth 

The U.S. economy continues to demonstrate strong performance. This growth is largely driven by healthy consumer spending.  

 

Market Performance and Volatility 

 

Stock Market Performance 

Some major U.S. stock indexes experienced declines. The S&P 500 fell by approximately 2% while the Nasdaq Composite decreased by about 1.8%. These downturns were influenced by the Federal Reserve’s cautious outlook.

 

Market Volatility 

Market volatility spiked due to the Federal Reserve’s hawkish stance and cautious approach to interest rate cuts. These decisions have influenced investor sentiment, leading to increased fluctuations in the market.  

 

Sector Developments 

·        Retail sales have remained steady, driven by sustained consumer confidence and increased spending during the holiday season. This trend highlights the resilience of consumer demand and its role in supporting economic growth.  

·        Housing market data has shown a decline, indicating a cooling trend in the housing sector.

 

Desla's Input

As we move deeper into the holiday season, it’s time for reflection and planning, not just in our personal lives, but also in our financial goals. If you’re considering adjustments to your portfolio or seeking clarity on how to align your investments with your long-term objectives, now is an excellent time to connect. At Desla Wealth Management, we understand market complexities and we proactively position our clients for long-term success while aiming to ensure that your portfolio is both stable and aligned with your financial objectives.

 

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