Market Perspectives (July 2013)

by Jim Baird on July 17, 2013

Executive Summary

  • Equities and other risk assets were in the red in June, as talk of the Fed tapering its asset purchase plan and a slowdown in China provoked fear in investors and contributed to a surge in volatility.
  • Interest rates rose sharply on this “tapering talk,” resulting in negative returns for bonds during the quarter.
  • The economy grew at a 1.8% annualized pace in the first quarter, according to the final estimate, slower than initially thought. Expectations point to a similar or modestly slower pace of growth in the second quarter.
  • Inflationary pressures remained in check in May and joblessness remains elevated, providing the Fed ample room to maintain its accommodative stance

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