Highlights

• Equities rose higher in the first quarter (Q1) despite weaker investor sentiment due to rising economic uncertainty and a Federal Reserve (the Fed) determined to bring inflation back down closer to its 2% target.


• Economic growth remained resilient in spite of high rates and inflation and a retrenching consumer. Consumer demand weakened but remained relatively strong despite high inflation, rising economic uncertainty and elevated geopolitical risks.


• U.S. inflation fell to 6% in February, year over year (YoY). While the decline in inflation is welcome, it remains well above the 2% target of the Fed. The Fed hiked interest rates by 25 basis points (bps) in January and March and is likely to slow, pause or cut rate hikes later in 2023 to ensure economic stability while seeking to bring inflation rates closer to its target.