Key Takeaways
The SVB Asset Management Economic Report is a quarterly review and outlook on economic and market factors that impact global markets and business health.
01 September’s FOMC meeting concludes with a rate cut.
The committee reduced the fed funds rate by 50 basis points in its first rate cut in four years.
02 Both Inflation and the labor market have softened.
Core PCE rose 2.7% year-over-year in August 2024. The Fed observes that “job gains have slowed.”
03 Lower rate expectations boost fixed income performance.
Both government and corporate bonds perform strongly in Q3 2024.
Inflation Trends Downward
Core PCE rose 2.7% YoY in August 2024, which is down from 3.8% in August 2023.
The Fed Cuts Rates
A softening labor market and moderating inflation lead the Fed to cut rates by 50 bps in September.
Strong Returns Across Major Asset Classes
Despite some volatility, Q3 2024 saw strong performance in equities and fixed income markets, encouraged by the prospect of lower rates.
Bond Market Performance is Solid
The shift in market expectations for interest rates helped propel performance for both government bonds and credit.
