Uncertainty among global markets rose as conflict in the Middle East elevated tensions and roiled energy markets.
There is a growing concern that the Fed may not have been as responsive as it should have in responding to slowing economic data numbers, prompting some economists and analysts to increase the possibility of an economic slowdown or recession.
Volatility returned to the equity markets in July as earnings became a focal point for technology and other growth oriented sectors.
Markets were influenced by election dynamics and economic data in June as equities and bonds responded to uncertainty surrounding the direction of future fiscal policy and when the Fed might commence its rate reduction initiative.
Mixed data sent equity and bond markets into uncertainty, as economic expansion appears to be cooling, yet inflation remains a burden for consumers nationwide.
Geopolitical tensions in the Middle East along with the ongoing invasion of Ukraine in Europe, is escalating defensive positioning in the markets as funds are being diverted to less volatile asset classes.
A stronger then anticipated jobs report reduced chances of a Fed rate cut in June as projected by analysts.
The Federal Reserve decided to leave rates unchanged in February, igniting concerns among the financial markets that interest rates may not fall as soon as many had expected.
Financial markets started the year off with an eye on earnings, the upcoming election, and developments in the Middle East and Ukraine.
This past year witnessed one of the most ambitious executions of interest rate hikes by the Federal Reserve in recent history, with rates rising four times in 2023.
