Highlights

• Equities continued their run higher in the second quarter (Q2), as investor sentiment was boosted by moderating inflation and stronger-than-expected growth, despite high interest rates.


• Economic growth slowed throughout the quarter but remained resilient despite the Federal Reserve (the Fed) keeping rates high. Consumer demand remained stable, supported by a tight labor market and excess savings.


• U.S. inflation fell from 4% in May to 3% in June, year over year (YoY). While the decline in inflation is welcome, it remains well above the Fed’s 2%target. The Fed hiked interest rates by 25 basis points (bps) in May and paused rate hikes in June but will likely raise rates by another 25bps in July and remain laser-focused on bringing inflation down to its 2% target.