Market Report for March 22, 2023 | Affinity Capital

March 22, 2023

Today, the Federal Reserve lifted rates by a quarter-point, raising the key benchmark at a range of 4.75% to 5%, the highest since 2007, from near zero a year ago.  This is the ninth increase in less than a year as they continue to fight a spike in inflation unseen in the past forty years.

Fed officials now expect economic growth to be slightly slower this year, and inflation slightly higher, than they predicted in December. They also forecast the need for additional rate hikes going forward.

The chairman of the Federal Reserve, Jerome Powell, said that the American banking system was “sound and resilient”. This is in reference to the recent failure of three U.S. banks in the last two weeks as well as the fall of Swiss investment banking firm Credit Suisse.

Prior to the bank failures, it was anticipated that a rate hike of one-half percent was predicted and these latest events will lead to tighter lending criteria by the financial industry. This is one purpose of raising interest rates. This event may have accomplished what the higher anticipated rate hike intended.

We have been talking lately about further cash management strategies, both for income and for capital preservation.    U.S. Treasury Bills maturing in 30 days or less are paying above 3.90% APR or annual percentage rate, while 30-year Treasuries are yielding 3.60%.

This is a flashing recession signal when short-term rates are higher than long-term. We are taking advantage of these higher short-term rate for our client portfolios.

We continue to be cautious about the stock market and our portfolios reflect this outlook. Economic indicators as well as stock and bond market data lack clarity going forward and we will be  monitoring and evaluating the Federal Reserve statements following today’s rate hike. At the end of this first quarter,  earnings  will be announced.. These events will be closely watched and will give us insight into the strength, or weakness, of economic activity later in 2023.

At the market close today, the Dow Jones Industrial Average was down over 500 points.  We continue to be in a bear market despite some periodic market rallies, and we continue to look for long-term opportunities.

As always, please feel free to reach out to us with any questions.  We thank you for the confidence you have placed in Affinity Capital to manage your investments and navigate these time together.

Signals from the Fed: Inflation, Growth, and What Comes Next

August 22, 2025
It was a Fed-heavy week, with three major developments that matter for markets and the economy. FOMC minutes (July 29–30) — released Wednesday (Aug. 20). The minutes reinforced a data-dependent stance : participants saw continued progress on inflation but noted that risks aren’t one-way, citing pockets of labor-market cooling and the growth impact of tighter financial conditions. Policymakers emphasized flexibility and the need to see inflation moving durably toward 2% before declaring victory. For investors, the takeaway is that the bar for rapid policy shifts remains high, but the Committee is clearly keeping both sides of the mandate in view. Weekly balance sheet (H.4.1) — released Thursday (Aug. 21). The Fed’s weekly statement showed the usual moving pieces: securities holdings, reserve balances, and program usage. While week-to-week changes can be noisy, the release remains a useful pulse on system liquidity and the runoff of the Fed’s portfolio under quantitative tightening . Markets watch aggregate reserves and Treasury General Account flows because they can nudge front-end rates and funding conditions at the margin. Jackson Hole — Chair Powell’s Friday address. At the Kansas City Fed’s annual symposium, Chair Powell underscored that policy decisions will continue to be guided by incoming data . He highlighted the balance between sustaining expansion and finishing the job on inflation , noting tariff-related price pressures and supply-chain considerations among factors being monitored. The message: no preset path, but openness to adjust as evidence accumulates. Historically, Jackson Hole is more about long-term framework and risk management than near-term moves, and that tone held this year. What it means for the days ahead Near-term market drivers will be how inflation and labor data align with the Fed’s “proceed carefully” posture. • If inflation continues to edge lower while growth holds steady, the door stays open to gradual policy easing later this year. • If price pressures re-accelerate—or if hiring slows more sharply than expected—the Fed may extend its wait-and-see approach. Liquidity dynamics from the Fed’s balance sheet runoff will remain a background factor , but the central story is still inflation’s glide path and the durability of demand . Investors should expect choppy trading around key data releases , with markets pricing probabilities rather than certainties. As always, we welcome your questions and are here to support you . At the heart of everything we do is our commitment to “ Wealth Management for Life ”—providing enduring guidance for you and your family’s financial success.

Fed Moves and Market Trends | Affinity Capital

August 6, 2025
Markets entered the week with a boost of optimism, fueled by softer labor data and growing chatter that the Federal Reserve might be leaning toward a rate cut this fall. But that optimism didn’t last long . As the week unfolded, economic uncertainty returned to center stage: fresh concerns about tariffs, underwhelming corporate earnings in some sectors, and signs of consumer fatigue in key parts of the economy tempered the early enthusiasm.

Weekly Market Update: Stability Amid Data and Tariff Jitters | Affinity Capital

July 17, 2025
This week’s stock markets were marked by tight trading ranges, record-setting highs in tech, and a backdrop of macro uncertainty. The S&P 500 (through SPY), Nasdaq (QQQ), and Dow (DIA) eked out modest gains, shrugging off headline volatility tied to Fed independence concerns and escalating tariff threats.