Stocks have had a great start to 2023, with optimism fueled by the recent slowdown in the Fed’s rate increases, moderating inflation, and the possibility of a pause in hikes in the second half of the year.
The Federal Reserve raised interest rates by 25 basis points (bps) at its first meeting of 2023, pushing its key policy rate to 4.5%-4.75%. Noting progress and developments over the past few weeks, Fed Chairman Jerome Powell acknowledged that “the disinflationary process has begun.” Meanwhile, investors cheered over the strong hints that the Fed is nearing the end of its hiking cycle.
