The market narrowly broke a four-week losing streak with the S&P 500 gaining 0.5% and Nasdaq Composite +0.2%. The equal-weighted S&P 500 beat the main indices closing 0.7% higher.
The market rallied on Wednesday after the Fed held rates unchanged in a unanimous vote. More importantly, the Fed decided to slow the rate of QT. Fed Governor Christopher Waller dissented on slowing the pace of QT. His preference to maintain the current level of QT was overruled as the committee opted to slow the monthly runoff of Treasury securities from $25 billion to $5 billion starting April 1, while keeping mortgage-backed securities runoff unchanged at $35 billion.
The Fed acknowledged rising economic uncertainty while maintaining that the Fed remains attentive to both sides of its dual mandate. The Fed lowered its 2025 GDP growth forecast from 2.1% to 1.7% while simultaneously raising its PCE inflation projection from 2.5% to 2.7% (core PCE ticked up from 2.5% to 2.8%). Despite this, the median estimate for the fed funds rate held steady at 3.9%, implying an expectation for two rate cuts this year.
The market ended the week pressured by several disappointing quarterly reports which included FedEx, NIKE, Lennar, and Micron. This was almost enough to drag the market to a fifth week of losses but the bulls prevailed if only by the skin of their teeth.