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Chief Economist Scott Brown discusses the latest market data.

Tensions in Ukraine dominated. Share prices fell and bonds rallied.

Tensions in Ukraine dominated. Share prices fell, bond yields declined and oil prices popped, but markets reversed direction on news that Russia was willing to come to the negotiating table.

Personal income was flat in January (-2.1% y/y), as the end of the extended child tax credit was partly offset by the 5.9% cost-of-living adjustment in Social Security. Private sector wage and salary income rose 0.5% (+11.2% y/y). Personal spending rose 2.1%, following a 0.8% decline in December (+11.8% y/y). The PCE Price Index, the Fed’s chief inflation gauge, rose 0.6% (+6.1% y/y), up 0.5% (+5.2% y/y) ex-food and energy. Durable goods orders rose 1.6% in January, up 0.7% ex-transportation, with a large upward revision to December.

Next week: The situation in Ukraine will remain key, but it will be an important week for the economic outlook and Fed policy expectations. Chair Powell’s semiannual monetary policy testimony is likely to remain consistent with a 25-bp hike (rather than 50 bps) in mid-March, then another 25-bp hike at every policy meeting (perhaps pausing when the balance sheet reduction starts later this year). ISM surveys for February should show strength. The February Employment Report will be subject to some seasonal distortions, but the underlying trend in nonfarm payrolls should remain strong.

Indices

Consumer Money Rates

Currencies

Commodities

Bond Rates

Commodities

Bond Rates

Treasury Yield Curve – 2/25/2022

As of close of business 2/24/2022

S&P Sector Performance (YTD) – 2/25/2022

Economic Calendar

All expressions of opinion reflect the judgment of the author and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business February 24, 2022.