Week In Review
Fed Chair Jerome Powell spoke at Brookings this week and gave us some insight as to what the Fed is considering at the upcoming FOMC meeting in a couple weeks. Before the Q&A portion of the event, he stood at the podium and spoke about how the aggressive stance they've taken this year on raising rates does take time to work its way through the financial system, and that the "time for moderating the pace of rate increases may come as soon as the December meeting.” He also added, "History cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”
We had the Fed's preferred measure of inflation, the Personal-Consumption Expenditures index, show that inflation continues to cool off, confirming what we saw from other reports (CPI, PPI) over the last few weeks. On Friday, the jobs report showed that the economy added more than a quarter of a million jobs in November, more than expected. The unemployment rate is 3.7%, and the labor market is as hot as ever.
On Monday the markets were down quite a bit in response to the unrest in China. However the market's attention was shifted back at home in the second half of the week as the focus was on Powell's comments and the hotter-than-expected November jobs report. The S&P 500 finished the week up 1.1%. It was less than 2 months ago the market was at the lows for the year down more than 25%, but we've had a strong rally off those lows.