December 2018 Economic Recap
The stock market sell-off continued to dominate news in December. The Dow and S&P 500 briefly crossed into bear market territory and finished the year down 5.6% and 6.2%, respectively. This was the worst annual performance for both indexes since 2008, when both logged declines in excess of 33%. It also marked the first time in history that the S&P posted a loss after rising in the first three quarters of the year.
As expected, the FOMC voted to raise short-term interest rates by 25 bps to a range of 2.25%-2.50%. In response to the recent volatility, the committee lowered its median projection for rate hikes in 2019 from three to two. Nevertheless, the Fed did not signal a much anticipated “pause” in the hiking cycle due to continued strength in the underlying economic data. Markets have since moved further away from the Fed and are currently projecting lower short-term rates by the end of 2019.
For a deeper consideration of the economic data released during December, please follow the links below: